Owner Carry - Is it worth the risk?

[ScrewedInPDX]

There are risks for the buyer especially if a realtor is involved for the seller and the realtor is not acting in good faith, or the owner for that matter.

I had a realtor meet me at the title company supposed to open escrow for an owner carry contract and they took $45000 and had me sign an owner carry contract with an addendum that stated my $45,000 was non-refundable, and then had me sign what they said was a lease for the time until I financed into my own name. The term was 5 years of the owner carry contract. The owner carry contract disappeared after the realtor told me she would provide a copy for me in 2 days, and I was left with a lease purchase contract with an addendum that made my $45,000 non-refundable if I could not purchase the home.

The realtor was in Portland Oregon and has opened her own real estate firm.

Have any contract you sign reviewed by an attorney, and make sure any money is not given directly to either the realtor or the owner directly.

[suz1023]

How timely!
I too own a home outright and am selling it. I have potential buyers who have asked about owner financing.
I am thinking of asking for 25% down, 10% interest and full asking price.

My question---I want to word the contract so that if (for instance) three payments are over 15 days late or missed than they are in violation of the sales contract.
At that point I would start foreclosure proceedings?

I will be using my attorney of course, but am still in the data gathering stage.

[jackmichigan]

Originally Posted by suz1023

How timely!
I too own a home outright and am selling it. I have potential buyers who have asked about owner financing.
I am thinking of asking for 25% down, 10% interest and full asking price.

My question---I want to word the contract so that if (for instance) three payments are over 15 days late or missed than they are in violation of the sales contract.
At that point I would start foreclosure proceedings?

I will be using my attorney of course, but am still in the data gathering stage.

In many cases, the process for forfeiture or foreclosure is set in state law. You can likely establish certain late fees, but merely being late on a few payments will likely be insufficient grounds for foreclosure, provided they are paid up-to-date. Since they will have an equitable interest in the property, even if they are delinquent in payments, they will most likely be given a redemption period to make payment and retain their interest in the property. (Of course, state laws may vary on this.)

If you do happen to provide owner financing, with few exceptions, you should not convey the Deed and take back a mortgage. Instead, you should do a Land Contract (or whatever it might be called in your state) whereby the Deed does not transfer until the contract is paid off in full. It's usually easier to foreclose on a Land Contract than it is with a mortgage.

[suz1023]

Thank you Jack, that's very helpful.

[wpme]

Curious, on several occasions while talking to realtors about listing vacant properties to sell, I've mentioned I would be willing to carry a note, each time the realtors just rolled their eyes? Whats up with realtors viewpoints on owner financing