September 17, 2007
Important Tools for Selling Or Buying With Owner Financing
In my previous blog, I wrote about one of the important tools, that is, wraparound mortgage. I did that by example. If you haven’t read it yet, you can click here to read the details about it. In addition, there are other two important tools you should also know about. I write it from home seller's propective although the title of this topic is "Important Tools for Selling Or Buying With Owner Financing'.
1. Land contract
Land contract, also called land installment contract, or agreement for deed, or contract for deed, means the same thing but varies from state to state. As a seller, you should check out the law to see which term applies in your state.
Each term mentioned about serves the purpose for wraparound mortgage. Through this contract, the deed remains with you as the home seller until the homebuyer pays off all the debt. The homebuyer has the equitable interest in your property.
2. Deed of trust
A deed of trust is a contract by which the title of a property is conveyed to a trustee who is usually a non-related entity. This contract involves three parties, the trustor, trustee, and the beneficiary. The trustor is the owner of the property, who borrows money from the lender. The trustee is the non-related entity, who is the one holds the title after the deed of trust is signed by the trustor. The beneficiary is the lender who loan the money to the trustor if the deed of trust is structured for loan repayment purpose.
You should always consult with your legal counsel whenever you are using these tools. Always ask a good legal counsel to prepare all the legal documents for you whenever it is involved in financing. Never, never, try to do it by yourself.
Always remember to control or prevent buyer’s default on payments whenever you are doing owner financing. Read my home selling blog on how to protect you from buyer default by clicking here or subscribe my eBook to learn more about owner financing here.
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For other related home selling tips from my home selling blogs, please click following lincks:
Pownce it!
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