Owner Financing - Safety Tips

Why offer owner financing when you sell? A higher price, to start with. Add to that a good return on your money, a faster sale, and an easier sale of a "problem property." Good reasons, but how do you do it safely?

1. Ask for a large downpayment. This is the most obvious way to be safe, but not always possible. The point of owner financing is to help the buyer get the property, and downpayment is one of the areas most buyers need help.

2. Ask for other security. If a buyer wants it with little down, and you like the return you'll get, make it safe by putting a mortgage on other property that the buyer owns. Agree to release the mortgage when they've paid down the balance to a certain level.

3. Credit checks. Ask them to pay for and bring you a credit report. Bad credit might be okay, but type of bad credit is important. An unpaid hospital bill they're disputing is obviously not as relevant as their unpaid loans.

4. Use your instincts. Are you usually right about people? If so, give some weight to your judgement of your buyer's character. Personally, I'd trust a man who felt morally obliged to pay his debts over a playboy that happens to have decent income at the moment.

5. Look at the whole picture. Let's suppose that a bank will loan your buyer 90%, and is okay with you taking back a second mortgage for up to 5%, allowing the buyer to get in with only 5% down. If you're getting 6% more than you expected by accomodating the buyer's needs, where's the potential loss? You're okay if he never pays, right?

6. Talk to a lawyer. In some areas it may take two years to foreclose on a mortgage through the courts, and only six months to foreclose on a "contract for sale." Knowing these things can help you structure the deal in the safest way.

Owner financing makes it easier to sell, and to get a higher price. You just have to be safe about it. Let a real estate lawyer review your paperwork, and use the tips here.

Posted by Mary Chamberlin on December 13, 2008 at 12:00 AM

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Mary Chamberlin is affliated with Century 21 Energy Shield, which is located in Hanover, NH. For further assistance please use the contact information located on the right.

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Local Information for Hanover, NH

Latitude: 43.703708 -- Longitude: -72.281371

ZIP Codes for Hanover, New Hampshire	03755
Area Code for Hanover, New Hampshire	603
Time zone for Hanover, New Hampshire	EST

Other Area Cities: Hanover, NH Claremont, NH Lebanon, NH

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Hanover is a town located on the Connecticut River in Grafton County, New Hampshire, United States. The population was 10,850 at the 2000 census. It is best known as the home of Dartmouth College. Hanover borders the towns of Lyme, Canaan, Enfield, and Norwich, Vermont, as well as the city of Lebanon. Norwich and Hanover share the first and one of the few inter-state school districts in the nation.Norwich and Hanover are two of the small number of towns that travellers must pass through while hiking the Appalachian trail. Hanover is also the home of the US Army Corps of Engineers Cold Regions Research and Engineering Laboratory (CRREL).Hanover has been home to Dartmouth College since 1769.There are a great many trails and nature preserves in Hanover, and the majority of these trails are suitable for snow shoes and cross-country skis. -- Source: Wikipedia.com

New Hampshire 2000 Census Population Profile Map

	Hanover	New Hampshire	United States
Population	8,162	1,235,786	281,421,906
Median age	21.9	37.1	35.3
Median age for Male	21.7	36.4	34
Median age for Female	22.1	37.8	36.5
Households	1,829	474,606	105,480,101
Household population	4,337	1,200,247	273,643,273
Average household size	2.37	2.53	2.59
Families	967	323,651	71,787,347
Average family size	2.95	3.03	3.14
Housing units	1,891	547,024	115,904,641
Occupied units	1,829	474,606	105,480,101
Vacant units	62	72,418	10,424,540

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Owner Financing - Safety Tips

Local Information for Hanover, NH

Latitude: 43.703708 -- Longitude: -72.281371

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