Need info on seller financing

[jennilouwho]

Hi!

I will call professionals in the morning, but in the meantime I'm wondering if anyone knows anything about seller financing and what professionals I even need to call . We are trying to sell our house. We bought it for $100,000 5 years ago, put a lot of work into it and can now sell it for $140,000. We really want to move closer to my husband's work, but we're having a hard time finding qualified buyers. We have a couple interested and they say they can put $50,000 down if we can seller finance at 5 percent. I do not know anything about that. Would we be taxed on the $50,000? How exactly does everything work? Do they pay property taxes and insurance or do we still do that? Is it worth the risk? Anyone have any opinions??? I'd really appreciate any input!

Jen

 

[IDoDis]

Sounds to me like it could be risky. Your potential buyers want you to finance the deal probably because they can't get their own loan from a bank. With 50K downpayment, you'd have to wonder why??? Either way, I'd highly advise you to hire a real estate attorney to help you and make sure you don't get taken for a ride.

This article might answer some of your questions:
http://www.nolo.com/legal-encyclopedia/article-30164.html

 

[msmayor]

Well, here's the thing - do YOU have a mortgage on the house? If so, you most likely will not be able to "seller-finance" unless you have the money to pay off the first mortgage.

You can't sell the house to these people and hold a note without satisfying the ORIGINAL mortgage on the house. Your own mortgage company will not permit it.

 

[jennilouwho]

Well, here's the thing - do YOU have a mortgage on the house? If so, you most likely will not be able to "seller-finance" unless you have the money to pay off the first mortgage.

You can't sell the house to these people and hold a note without satisfying the ORIGINAL mortgage on the house. Your own mortgage company will not permit it.

Interesting, thanks! We do still hold a mortgage. I'm pretty sure I don't want to agree to this anyway, but was curious as we'd had a couple realtors also call and ask if we'd be willing to do seller finance. We really just want someone to buy this and get out of here!

 

[jennilouwho]

Sounds to me like it could be risky. Your potential buyers want you to finance the deal probably because they can't get their own loan from a bank. With 50K downpayment, you'd have to wonder why??? Either way, I'd highly advise you to hire a real estate attorney to help you and make sure you don't get taken for a ride.

This article might answer some of your questions:
http://www.nolo.com/legal-encyclopedia/article-30164.html

Thanks for the link! I'll read over that!

 

[SoonerSarah]

We considered doing something...I think it's called a loan assumption. Some loans (the one that we had) do not allow this. but with a loan assumption, you and the buyer agree on an amount, say your mortgage has $90,000 left on the note, they assume your loan and pay you $50,000. Or whatever. With this you specifically have to call your mortgage company.

If you go through a real estate lawyer, you should be able to have all questions answered and access to their financial info so that you are assured of what you are doing. The woman that we considered doing the loan assumption with was having difficulty getting a loan herself not because she had poor credit, or not enough money for a downpayment, or because she was deliquent in her accounts, but simply because at the time, it was difficult to get a loan. It took a bit longer for her to secure her loan, but she had excellent credit and such. She was building up a rental business and is now doing very well for herself. She just needed some help getting to where she needed to be.

 

[Cheshire Figment]

Contact a company similar to "Help You Sell" This is a non-commission real estate company which will chage a fixed fee (usually less than $3,000) and will assist you with the contract and everything that needs to be done. They will assist you in all phases of the sale.