Profile picture for user6410285

What to look out for when buying an owner will carry home?

What are the pros and cons of buying an owner will carry home?
  • May 30 2012 - US
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Answers (9)

Profile picture for Russ and Rory
Over the years I've seen the most common reasons a seller is willing to finance is because the home is overpriced or cannot qualify for typical financing.
  • May 30 2012
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Profile picture for Ofe Polack
You asked a question and I gave you an educated answer, wetdawgs also gave you a similar more specific answer.  You are not totally correct in your assumption that Realtors do not make a commission on owner financed properties, we do when we put the transaction together.  A roof over your head does not necessarily mean that you need to buy.  If you are willing to pay a down payment that is higher than conventional, FHA and USDA, and it is non-refundable and pay higher interest rates, by all means go for it.l
  • May 30 2012
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Profile picture for Rita Walker
Check with a local title office. Let them know what you want and if it is something that can be done in your state.
They will let you know if is something that can be handled through their office or they can most likely give you a few referrals.
Compare prices and services.
  • May 30 2012
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Profile picture for user6410285
@ofe polack, No, whats most important to our family is a roof over our head. So our rent or mortgage always gets paid first. And for your response as to "Owner financing is not a buyer friendly option to purchase a home." or is it not a benefit to you because you make no money out of the deal?
I don't trust banks anymore because of what they have done to all my family members.So we don't want to go through a bank for a loan.

@sharon sapp, why is it not legal for a homeowner to do what they want with their property? They bought it, its theres. Why should the government hold any other law over them. America is about freedom right? Tell me what law you are talking about so I can petition it and get others to petition it too.
  • May 30 2012
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In some states, it is no longer legal for the seller to act as a bank. Be careful how you work this deal and seek some legal advice.
  • May 30 2012
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Profile picture for Ofe Polack
First of all examine the reasons for which you would like to go this way instead of a conventional or FHA loan.
If it is due to credit issues, wouldn't it be best to fix the credit first?
Wetdawgs coverd the rest.  Owner financing is not a buyer friendly option to purchase a home. 
  • May 30 2012
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Profile picture for user6410285
We don't have a real estate attorney. How much do one of these cost?
  • May 30 2012
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Profile picture for Rita Walker
To add to Wetdawgs answer ....

If the Seller has no mortgage on the property the sale can be closed as you would a conventional mortgage (rather then a contract for deed or land contract). The difference would be you are now the owner (with deed) and the Seller is the bank (holding the mortgage).

The mortgage instrument needs to be written in the best interest of both parties. Make sure you have a good Real Estate Attorney working on your behalf.
  • May 30 2012
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Profile picture for wetdawgs
Pro:  may be able to get into housing before qualified by normal lenders.

Possible Cons: 
*substantial down payment required, non-refundable.

*interest rate higher than market value interest rates, usually considerably higher.

*deadline on obtaining conventional financing - if not met, lose all payments.

* if the owner still has a mortgage, buyer is trusting that owner will continue to pay mortgage (and taxes, depending on contract).





  • May 30 2012
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