I want to offer my neighbor to buy his house using seller financing. The needs a lot of work! I plan to offer 12 months financing with a balloon payment after 12 months when I obtain a conventional mortgage loan. What real estate form is best used for this in Grand Rapids? I also plan to use a title company. Do I ask them? Thanks for your input!!
You would use the real estate offer form approved from your state and write a contract that sets up the seller financing. I set these deals up by offering to buy the property (transaction 1) and then signing a loan agreement with the owner (transaction 2). If you build the deal this way then if they do not want to seller finance you can still seek other financing while having the home under contract.
Does that make sense?
If you want help on what to put into both contracts just ask here in your thread.
That's exactly what I want to do here. Here is the link that our region uses for a real estate purchasing http://www.wmlar.com/files/Documents/Purchase_Agre...
I would definitely ask your neighbor first, to see if he would entertain financing the purchase for you. Then, if yes, you could hash out the terms with him (interest rate, length of loan, down payment, if any, etc.), and write up a contract.
To write it up, just add "seller will finance (state the terms you agreed on)" to the "special stipulations" section of the contract. Then let the title company or attorney (depending on your state) write up the actual note. Also get the title company to set up payments through a loan servicing company.
If you're new to writing up contracts, just write everything you both agree to on a piece of paper, and give it to the title company.
One thing to note about the document you linked, it is copyrighted so you cannot use it unless you have permission from the copyright owner (look at the bottom left hand corner of the page). You may have to write your own contract (you can use the one you linked to give you ideas, but do not copy it or any portion of it) like @Kim Banks said make a list of the things you want in the contract and have someone (title company or real estate lawyer) write you a contract.
The seller financing contract can be structured much like a contract you get from any lender (just watch out for copyrights). I write my own contracts using other sources for inspiration and then have a lawyer review them. This is perhaps the least expensive way to create a legally binding contract. If you have a car loan or mortgage go find the contract you signed and that should help start to structure your deal with your neighbor.
This may seem like a lot of work, but remember you only have to do this level of work once. After you have a good solid Purchase Contract and Seller Financing Contract written and reviewed, save them! Then all you have to do is tweak them a little for each deal you want to use them. The time, effort, and money now will save you tons later especially if you plan on doing a lot of Real Estate Investing.
make sure you know how much your neighbor is willing to do seller financing. I know so Es lenders only offer 6% for SF.
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing