How To Sell Using Owner Financing?
Can someone guide me in the steps for doing an owner-financed sale. I have a house worth about 125-130k to unload and figure the best way to get market for it would be to offer owner-financing. I welcome any advise to clarify my thinking. Thanks. 
MikeVass04,
Glad to meet you.
Since you used the Lease/Option forum to ask this question, this would tell me you are leaning with this method of selling your property.
I am not a lease option investor, so I will tell you the way I believe you will make out better.
You can sell using a Contract for Deed (CFD) Contract for Sale, etc. depending on the state specific terminology used where you live.
What you are doing is selling where your buyer does not get the deed until the terms of your contract with them are met.
This contract will contain the information and terms you reach with your buyer, for instance the price you are asking, amount you want down, interest rate, how long the term of the contract is, 1yr, 2yrs, etc. at which time you will require your buyer to payoff the existing mortgage.
The reason I use a CFD is I find you get a larger down, the buyer has a tendency to take better care of the property, less of a chance to move out in the middle of the night (L/O renting vs CFD buying) and you can use his payment record to show to lenders when the time comes for the new financing, which carries a big stick with lenders.
You advertise the down payment you want, no qualifying, and a description of the property. If you get a good down on the property. Terms are very important when selling, but they also bring a premium for you the seller when done this way.
Is this what you had in mind to do with the property?
John $Cash$ Locke
John- this is not my post, but I do have a couple questions about CFD.
1. How do you market this? Do you literally say "contract for deed" in the ad, or simply something to the effect of "easy qualify, no bank qualify," etc?
2. Is there a good book or source of info on CFD?
3. What is the biggest down side of a CFD? I would assume it would be that if your buyer/tennat is a deadbeat, you will actually have to forclose on the property?
Thanks.
Dear John, (ah memories)
Is this the same as the standard Land Contract we utilize here in the State of California? Sounds like it. Must be good cause the State of Calif in their Veterans Bureau use it to hold title during the period of a Cal/Vet loan. I think they did it as they felt that Vets would all have bad credit and would be attached all the time. This way, not being in title they would be free from attack.
Of course we all grew up and gained assets and the world has changed.
Cheers Lucius
John,
Thank you. The CFD sounds like a great instrument for what I would like to do with less of the down side. Also, I'm curious to see your answers to fordecan's questions regarding the specifics of this type of contract. I'll let you know how it goes.
MikeV
[ Edited by MikeVass04 on Date 01/30/2004 ]
We like CFD for owner fiancing and we balloon them out depending on area of town. (if its a good appreciating area we up the sell above market too)
FYI Here a CFD can be refinanced by the buyer after its been seasoned. (if you do a legal owner fi then you can get some lenders to refi to the buyer in 6 months or so)
Yeah, that is a down side but there are ways to get a deadbeat out of the property without going through a full foreclosure. One way is taught in $Cash$'s course and I'm sure he would not appreciate me sharing information that all of students have paid for. There are ways to get one out, you just have to be creative.
Quote:
3. What is the biggest down side of a CFD? I would assume it would be that if your buyer/tennat is a deadbeat, you will actually have to forclose on the property?
[ Edited by nebulousd on Date 01/30/2004 ]
Interesting Concept. Do you have an example of a CFD document?