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We generally buy houses with private mortgages, so selling them via private mortgages should work about the same, I'd expect. It's just like using a bank with a recorded mortgage and all, except the grantor of the mortgage is someone we know instead of a bank. Borrowing money from friends means that they will get the interest instead of a bank. I feel better knowing that the interest money is helping folks in my community instead of going off to some unknown banker I've never met.
Well, if we decide to pursue the option of selling and holding the paper, a lot of research will have to be done to determine the best ways to do it. We still haven't gotten much further along than 'maybe we should sell'. There's tons of stuff to move out of that house if/when we decide to sell it. The market is really good right now, though, which is why we're considering it.
We generally buy houses with private mortgages, so selling them via private mortgages should work about the same, I'd expect. It's just like using a bank with a recorded mortgage and all, except the grantor of the mortgage is someone we know instead of a bank. Borrowing money from friends means that they will get the interest instead of a bank. I feel better knowing that the interest money is helping folks in my community instead of going off to some unknown banker I've never met.
Well, if we decide to pursue the option of selling and holding the paper, a lot of research will have to be done to determine the best ways to do it. We still haven't gotten much further along than 'maybe we should sell'. There's tons of stuff to move out of that house if/when we decide to sell it. The market is really good right now, though, which is why we're considering it.
If you do decide to do owner (Seller) financing, it's generally better to do a Land Contract (aka Contract for Deed or other name) than it is to transfer title and take back a mortgage. With a Land Contract, the Deed doesn't transfer until the contract is paid off in full...and it is typically easier to foreclose on a Land Contract than it is on a mortgage.
Owner financing can work (whether as a Buyer or a Seller) but there a number of potential pitfalls. Some can turn out to be horror stories. I've entered into several Land Contracts as both a Buyer and a Seller. When I was a Buyer, there were no problems with any of the Land Contracts, just as in your case. When you sell to someone, however, they may not have the same discipline or sense of responsibility--no matter how well you may know them. Being in a bad Land Contract is much worse than being a Landlord with a bad tenant.
Above all, if you do consider providing owner financing, work with a good real estate attorney who is familiar with owner financing. However, with low interest rates, Seller financing is not something that I would recommend doing. Why take on more risk than is necessary?
We may have to do seller financing since the house probably won't meet very many lender's requirements. It's a 'non-standard' layout as well as construction method. It was built around 1910 and at that time I guess hallways and closets were over rated. In any case, it doesn't have any hallways or closets. It's got three bedrooms kinda lined up, a 'parlor' (i.e. living room) and a back kitchen addition. Off the back of that was a shower house, but the breezeway in between was enclosed and the shower house converted to a nice bathroom. The outhouse is still in the back yard. At one point, that got a concrete floor and a standard toilet plumbed into it so it's a nice outhouse.
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