Can I sell my home with owner financing and still comply with the Safe Act?
The Safe Act was written to govern the mortgage brokers to compel them to be licensed. This article goes over a lot of the questions that will arise, This act was not meant to further restrict restrict home owners when selling their homes. Many investors are saying that the act has put an end to owner financing as we know it.
I had a client call me to ask if he could still offer owner financing on a house that he owned, even if he is an investor and still be in compliance with the Safe Act. Most investors are unsure if they can do this and the act is not clear about this in anyway. My client had called everyone that he knew to ask this question and finally called me when he read my previous blog about the Safe Act. , Even attorneys were unclear about whether an investor was exempt.
This is my interpretation .
The best thing would be to try an attorney because I am not familiar the consequences of going against the Safe Act if you are going against it. It states if you are an owner selling a home on owner finance, it is okay. You do not have to be licensed because you are not doing it for a fee. You could look at it as if you are not accepting a fee and sell it with owner financing , but I would not chance it. If you bought the home on owner financing from an owner and are going to sell it, try selling it by contract of sale, or lease option. I would take this avenue or approach on everything that I sell with owner financing.
A contract of sale is a safe bet.
A contract of sale is a safe bet because the title to the property does not change, a memorandum is filed instead of a deed. Because no deed is filed, they cannot say that you originated the mortgage. The client can still take advantage of the tax write off as a home owner, In case of default a quit claim deed is signed by the buyer.
A rent -to-own contract will also work to sell your property.
A rent -to-own contract will also give you the desired results because the title does not change . This is the safest contract for the investor and the least desirable for the buyers. A rent-to-own-contract is the least enforceable. It is nothing more than a glorified rental or lease.
For more information on contracts of sale please contact me. See more at www.nevadainvestmenthomes.com
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