Have You Ever Completed a transaction with Owner Financing?

Real Estate Agent with HomeSmart Connect 471007886

If you could offer owner financing on your listings or provide it for your buyer clients who may not qualify for conventional financing, how much could you increase you business?





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Comments (45)

Michael Blue
Home Smart Realty West - Encinitas, CA
REALTOR - 760-889-8877, Encinitas/Carlsbad

I had a listing and the seller was willing to carry $200k, list is now $359,900 but we did not have one bite for seller financing, I was a little surprised.

Jan 24, 2012 03:53 AM
Paula Brown
Results Home Loans - Austin, TX

There are a lot of Wrap around mortgages being done here in Austin Texas monthly.  In Texas, the law changed a few years back making Contract for Deed "illegal" for lack of a better term, because of abuse by some (imagine that).

For the right set of parties it works great.  The key is to have an attorney draft the documents and then for the Seller to never let the Purchase get behind in payments, ever.  To start foreclosure proceedings immediately so that they know you mean business and that you are going to behave as a lender just like a big bank.  Show no mercy.  The other key is to have a ballon period in the note so that they have to refinance and to require that they meet with a loan officer (me of course) before closing.  We work together to get them refinanced before the balloon.

Jan 24, 2012 04:31 AM
Jirius Isaac
Isaac Real Estate &TriStar Mortgage - Kenmore, WA
Real Estate & loans in Kenmore, WA

While your blog is interesting, it was not really about owner financing.  What's up with that?

Jan 24, 2012 04:40 AM
M.C. Dwyer
Century 21 Showcase REALTORs - Felton, CA
MC Dwyer-Santa Cruz Mountains Property Specialist

About 2 years ago, one of my sellers offered owner financing to a contractor to fix up a burned down property my seller owned.    These can be tricky situations!    I am grateful for the California Association of REALTORS, where part of our membership fees pay the on staff attorneys to decipher these kinds of massive documents (2300 pages - really?!)  for us and create or modify our forms to allow us to stay within the guidelines of the laws.  

By the way, I'm hoping you answer #28, Jim, because I too am curious.

Jan 24, 2012 05:15 AM
Rob Arnold
Sand Dollar Realty Group, Inc. - Altamonte Springs, FL
Metro Orlando Full Service - Investor Friendly & F

My understanding is that if you do more than 3 owner financing transactions in a year, that Dodd-Frank requires to get a loan originator license as if you were a big bank. Crazy stuff.  I do offer owner financing occasionally when I sell investment homes and they are typically easy to sell doing that.  Plenty of people with decent down payments and marginal credit.

Jan 24, 2012 08:17 AM
Jimmy Phan
Phan real estate group in hickory

Hi Jim

have never had a seller financing transaction....so surely this is good to know

thanks for sharing Jim

jimmy phan

Jan 24, 2012 11:26 AM
Todd Anderson
You In Park City group - KW Park City Keller Williams Real Estate - Park City, UT
Park City | Deer Valley Real Estate


You lost me after the first couple of lines as the rest of the blog didn't deal with owner financing. Did you copy and paste two different blogs?

Jan 24, 2012 12:04 PM
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Pro Lifestyle Solutions

Greg, #24 opined that he's better off today along with the housing market than the previous 8 years under G.W. Bush, really? What slant and how is that relevant to Jim's post? You have the freedom of speech but I don't have to drink your kool aid in this forum and I challenge anybody who agrees with Greg to email or call me directly. Unbelievable!

Jan 24, 2012 12:33 PM
Winston Heverly
Winston Realty, Inc. - Atlantis, FL

Owner financing would be possible if wasn't for those evil Republician's is what I'm guessing No.24 may say. I for one did really well under W. along with everyone of this panel that flipped a property or two. Let's face it, life is a crap shoot, you got to know when to roll and know when to fold...and along the way enjoy the ride.

Jan 24, 2012 01:12 PM
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

It blows my mind to think about what they are doing to us.  It  is all about central planning.  

Jan 24, 2012 02:40 PM
Susan McCall - - Compass Realty Solutions
Compass Realty Solutions - Portland, OR
Listing and Buyer's Agent

Owner financing is perfect for some people, sellers and buyers alike.  I have a buyer client with $20,000 cash and NO credit.  He is debt free and owes nothing to anyone.  If he were to get a mortgage he would need to pay a much higher interest rate because he is good with his money.

I had this scenario a few years ago and it worked out perfectly for all involved.  The sellers owned an investment property outright and didn't want the chunk of cash.  The buyer had no credit and a large down.

A good real estate lawyer can put together an excellent contract that everyone is happy with.  Run the deal through escrow like a normal closing and set it up with the escrow company to receive the payments from the buyer and cut a check to the sellers.  There is a small monthly fee involved, but there is never a question of when the payment is received.

Voila!  It is so perfect.  The seller's get the interest and the payment, the buyer gets the house he wants at a reasonable interest rate.  And B of A or Wells Fargo doesn't get anything.  Happy?

Jan 24, 2012 05:59 PM
Paddy Deighan MBA JD PhD
federalfinanciallawgroup.com - Vail, CO
Paddy Deighan J.D. Ph.D

Dodd Frank is an abomination at best and hopefully it will get repealed after the elections....I also smiled when I read your comment about spending $200K for a $50,000 job...the real numbers are $278K!!!  AND I was HORRIFIED to discover that the AVERAGE government job is $120,000!!!!!!!!!!!! WHAAAAAAAAAAAAAAAAAAAAT???

Jan 24, 2012 06:40 PM
PRG Real Estate - San Jose, CA
VA Home Loan Specialist - SF Bay Area

I have not done any yet. I am interested in doing a transaction like this.

Jan 25, 2012 04:09 PM
Bob Miller
Keller Williams Cornerstone Realty - Ocala, FL
The Ocala Dream Team

Hi Jim, in over 6 years and over 200 deals I have only done 1!  They are complicated and the worst issue is the "due on sale clause" of most mortgages.

Jan 26, 2012 12:20 PM
Jim Holder
HomeSmart Connect - Arlington Heights, IL

Hi Bob,

You were likely doing a "contract for deed" where the owner's existing mortgage remained (against the property). What I'm talking about is true owner financing where the an owner financed mortgage with no existing lien is recorded on the property.

I am particiapting in a program where owner financing can be provided on most homes provided the buyer has some "skin in the game" and there is some equtiy in the property. If you would like more information about this program, please email me.


Jan 26, 2012 02:39 PM
Jim Holder
HomeSmart Connect - Arlington Heights, IL

If owner financing could help you increase your business, would you take the time learn the tools to get you there?

Feb 01, 2012 08:38 AM
Cheryl Dukes . . . . . Intown Atlanta
Solid Source Realty, Inc. - Atlanta, GA

I own a property I'd like to sell with owner financing. It sounds like there are a lot of things that need to be known before proceeding. Where can I find a good resource that will lay out the programs steps for me? 

Feb 20, 2012 12:51 PM
Matt Robinson
Professional Investors Guild - Pensacola, FL

I've sold a couple homes with owner financing, because I work with a lot of investors.  However, in traditional business it's just so rare that an owner is OK with holding back a note (and doesn't need the cash for the next house).

Sep 08, 2012 04:33 AM
Jim Holder
HomeSmart Connect - Arlington Heights, IL

What if you could offer seller financing to the self employed type prospective buyer who has "money" and "credit"  but, who can not obtain traditional financing (because of complicated tax returns) on almost any home?

Sep 08, 2012 06:10 AM
Jim Holder
HomeSmart Connect - Arlington Heights, IL

Cheryl Dukes, I suggest you pick up a copy Of "Owner Will Carry" and have seen this on the NoteTools.com site.


Sep 16, 2012 07:09 AM

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