why would an owner take 2nd position when offering seller finance

Question

why would an owner take 2nd position when offering seller finance?

owner is offering to seller finance a property he owns.

buyer wants the property but wants owner's mortgage to him to be in 2nd position to his (private money) down payment

why would a seller risk the chance to foreclose if payments are missed by taking 2nd position to the private money lender?

signed, perplexed in Poughkeepsie... :)

John Underwood · Answer

Ann, The seller might be having a hard time selling due to location or condition of the property. By offering to take back a 2nd mortgage it helps get his house sold. Also since private money is the first mortgage maybe there is a balloon payment due in a year or two where the seller will only be making this loan for a short period of time.

The seller will be getting a chunk of money from the first mortgage and may be happy to make interest on the 2nd mortgage for a longer time.

Ann N. · Answer

also, Would the homeowner need to be in 1st position if they were funding more than 50% of the deal?

Ann N. · Answer

Ok.... couldn't buyer be somehow working with the private money person to dupe homeowners into doing this though... thus taking a big chance on losing their property?.... if private money forecloses due to non payment... forgive my naivety.

why would an owner take 2nd position when offering seller finance

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