Owner financing option by giving a down payment for mortgage

Erie, PA · Member since 2017 · 11 posts · 1 vote

Is it possible to give a down payment to a seller who still owes on a mortgage for a property, to then seller finance the rest? Ex. 10k left on the mortgage, 10k down payment, seller now owns free and clear, seller is now able to owner finance.

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Brandon SturgillBusiness Member

Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes

1- Secure contract with purchase price and terms

2- Send contract to title (search and insure)

3- Draft note and mortgage (you'll need a lawyer to do this- less than $500 likely)

3- Seller uses proceeds (your down payment) to pay-off the lien (The title company will handle all this)

4- Close the transaction

5- Establish payments to seller

You'll want to make sure there will not be a delay between the payoff of the 1st lien- executing the "lien release" and closing your transaction- will require coordination. Just let the title company know all the details up front and they will be able to sort it out. They may prefer a slightly different sequence of events...

Have you set purchase price and terms?

@Jacob Budzynski

937-979-7000

Realize Multifamily Group11 Review

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Brandon SturgillBusiness Member
Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
8y
@Jacob Budzynski Absolutely. Once the seller settles the lien, they can originate a new first position lien to you. Let me know if you need assistance structuring the deal. Good luck!
937-979-7000
Realize Multifamily Group11 Review
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Jacob Budzynski
OP
Erie, PA · Member since 2017 · 11 posts · 1 vote
8y
@Brandon Sturgill, thanks! Yes how would the structure on that deal look? Order of operations wise
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Brandon SturgillBusiness Member
Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
8y
1- Secure contract with purchase price and terms
2- Send contract to title (search and insure)
3- Draft note and mortgage (you'll need a lawyer to do this- less than $500 likely)
3- Seller uses proceeds (your down payment) to pay-off the lien (The title company will handle all this)
4- Close the transaction
5- Establish payments to seller
You'll want to make sure there will not be a delay between the payoff of the 1st lien- executing the "lien release" and closing your transaction- will require coordination. Just let the title company know all the details up front and they will be able to sort it out. They may prefer a slightly different sequence of events...
Have you set purchase price and terms?
@Jacob Budzynski
937-979-7000
Realize Multifamily Group11 Review
View Page
2 Reply
Brandon SturgillBusiness Member
Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
8y
@Jacob Budzynski email me if you need additional information
937-979-7000
Realize Multifamily Group11 Review
View Page
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Jacob Budzynski
OP
Erie, PA · Member since 2017 · 11 posts · 1 vote
8y
@Brandon Sturgill Thanks! No we did not come to any terms, the seller's equity in the property was very low which took owner finance off the table.
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