Required Documents for Seller Financing
I am moving out of the Boston area, but recently learned that my landlord is looking to sell my current apartment. Since I will need most of my cash for a downpayment on the house we are buying, I thought seller financing could be a great way to purchase the apartment, since I know the seller is motivated and owns the condo free-and-clear. However, I have never done seller financing before, and I am wondering what exactly I need to get the deal done. I know I need a title company to write the title over to me - do I also need an attorney to draw up a loan agreement between the two of us? Is there any other documentation/ members of the real estate team that I should bring in? My landlord currently does not have a real estate agent, so no agents need to be included, either. Thanks in advance!
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#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
- Investor
- Austin, TX
Get a realtor to represent you. Do not tread these waters alone.
Hi Benjamin, you can negotiate and come to a practical agreement and terms but I definitely would get legal representation from a MA attorney before anything is signed if this is your first purchase. It's a small cost compared to the potential risks involved going at it alone.
Your landlord most likely will be utilizing an attorney on their end as it is.
Handwrite an offer with every detail, set a deadline, price, rate and number of years for the note, give him earnest money deposit and you both sign and date it.
Open escrow/title with local office, have them recommend a local attorney. Attorney can either assist writing the promissory note or refer you to someone. The title attorney can get all the disclosures typed up. You need to get the Master Insurance policy from the HOA, find out what reserve money the HOA has, find out if there are pending lawsuits in the HOA, and then you will also get HO6 contents fire insurance from your own agent. Call the agency that does your car insurance and bundle them.
As already stated, you definitely should get an attorney who handles these transactions, and I hope you did. It's a lot easier as a buyer than a seller, and at current rates, it could be a great opportunity. Good luck!