Selling home (owner finance)

[Krk77486]

Does anyone here have any experience with selling a home and owner financing it? If so could you shed a little lite on how it works? Do’s & donts... does it have to be paid of to do this? Any info is greatly appreciated.

[BrianL]

Don't do it. Period.

[Walker]

You will own the income tax liability for the entire amount for this year.

[JayB]

Hire an attorney to draw up a note and deed of trust between you and the buyer.

Use a title company to handle the transaction. Purchase the owners title policy. They will record the transfer deed along with the deed of trust from your attorney.

Wait for the payments to roll in, monthly, for whatever length of time you have agreed with the buyer. You do not have to finance 100%. Make the buyer bring some $$ to the table...20-30% at least.

That's all I got.

[Krk77486]

You will own the income tax liability for the entire amount for this year.

Can you elaborate on this? What if house has homestead? What would the tax liability be?

[Walker]

Im not sure about homestead. I think , it matters if you buy another home within a.certain period of time. I owner financed raw land a got a tax liability on 30,000$ due that year

[bowhuntertex]

I did and worked out great for me. Get with The Cripple on here. He drew up all necessary documents I needed to make sure I was covered 100%. I gave them 2 years to refinance in their name or the house reverted back to myself and all monies paid up to that point were mine to keep. I did find a good person to sell to and they had it refinanced into their name within that 2 year time period.

Again, get with the Cripple on here and he can answer all of your questions and walk you through the process. It was pretty simple to do.

[Gunnyart]

Hire an attorney to draw up a note and deed of trust between you and the buyer.

Use a title company to handle the transaction. Purchase the owners title policy. They will record the transfer deed along with the deed of trust from your attorney.

Wait for the payments to roll in, monthly, for whatever length of time you have agreed with the buyer. You do not have to finance 100%. Make the buyer bring some $$ to the table...20-30% at least.

That's all I got.

Make sure it's a residential deed of trust. It comes with a lot more headaches than buying land. Keep in mind the occupant has rights even if they default so be ware.

[Anythinghunter8]

Following. I am in the process of doing this to and I am telling people 20% down and then they will cover my note and them in two years they need to finance on there own, I am stilling having to find a attorney to draw paper work up, but I know I have to make sure the house is deeded to them so there forth they will pay taxes and I will also need proof of insurance on house

[BrianL]

If you do this on your own, you need to make sure lawyer does all correct docs and disclosures or you could lose your security interest in court. Doing it incorrectly can make the mortgage an UNSECURED NOTE! You have to follow same regs as a full-blown financial institution now.

[alwaysinshorts]

I would do it in a heartbeat!!!!! You have almost nothing but up side. You ask for a down payment just like any other lender then they make payments to you. If they get behind you can reclaim the home. And if that happens you sell it again. Win win either way.

My guess is that you think about possible damage to the house. Because you are the seller you are I. A position of power. Tell them they need to have repair insurance and they pay for that.

I don’t see the downside here

[Anythinghunter8]

does it make a difference if you still have a mortgage on it in your name? and you are owner financing?

[Walker]

I would do it in a heartbeat!!!!! You have almost nothing but up side. You ask for a down payment just like any other lender then they make payments to you. If they get behind you can reclaim the home. And if that happens you sell it again. Win win either way.

You need to consult a lawyer about this. I think in the event of default it would have to be sold at auction on the courthouse steps.

[bloodtrailer28]

I don't think the above is correct ^^^ at least not how it was laid out by the title company that we used. I could be wrong though.If they defaulted we could take the house back. I believe it was 3 months of no payments is what we have in the contract.

We sold one of our rental properties owner financing it and it was pretty simple. We made them put 50% down and they haven't missed a payment yet.

[bloodtrailer28]

does it make a difference if you still have a mortgage on it in your name? and you are owner financing?

I don't think you can owner finance it if you already have a mortgage on it. You might be able to get the mortgage company approve it but I'm not sure.