Owner Financing....Don't Forget This Option To Buy Property!

   You have a 40 acre woodlot to sell..as Joe Broker, you know land loans are not as easy to get and large down payments required thru a bank loan process.  So when listing, a good broker asks if the seller would consider financing.  Maybe the seller does not need the money to buy another place and would like more than a percent or two in a boring bank savings account return.  So the idea of a seven percent or more rate makes his/her heart race.  As a buyer of land or even home/business/cottage...see if the owner would consider a custom made owner financed deal.  All the protections of a regular first mortage situation except it's First Bank Of Owner holding the note, with late payment penalties, and obligations to pay taxes on time, to make improvements and not lay waste to the place.  Even a credit check and heck, why not have buyer have a term life insurance policy just for good measure.  Those are your terms .  The terms should fit the buyer's budget though.  What can you as a buyer handle without going belly up?  Don't make outrageous over ambitous plans to pay it off in a short time..because you need money left over for luxuries like gas, groceries, other obligations in your budget.  Make sure to have the option of pre payment in part or total of the mortgage without interest penalty.  If a buyer can put half down on a place, run that by the owner.  Good return, quick sale without bank appraisal, etc.  Hefty collateral with property and that chunk of change. Saves buyer money in avoiding bank changes.  Saves time. Makes seller money.  If the buyers says " Well..to be honest with you, my credit is a negative 123, in the middle of a foreclosure on my current home, just entering bankruptcy protection and divorce should be over in a year or so..." stay clear.  If a bank won't touch them...and they have leveled with you on how much financial chaos they are in with their poor track record, don't suggest seller should take a chance.  If they never make a payment, destroy the place and seller has to get courts and deputy sherriff involved to evict them...not a happy ending to this movie.  And it was your idea that went sour when destined for disaster from the start. A well thought out owner financing deal can be and should be win win for buer to save money and get a more attractive rate than bank.  And it is like money in the armored car the seller with the collateral of their own real estate for protection and security.