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 Patricia Hendeshot on December 13, 2008 at 12:00 AM

About Patricia Hendeshot
Patricia Hendeshot is affliated with Jenny & Cook Realty, Inc., which is located in Medina, OH. For further assistance please use the contact information located on the right.

As of 05/24/12 the Patricia Hendeshot RePage is ranked at 5,648 with 380 points.

Local Information for Medina, OH

Latitude: 41.135899 -- Longitude: -81.864069

ZIP Codes for Medina, Ohio	44215 44256 44258
Area Code for Medina, Ohio	330
Time zone for Medina, Ohio	EST

Other Area Cities: Akron, OH Brunswick, OH Wadsworth, OH Rittman, OH Richfield, OH Cuyahoga Falls, OH Norton, OH Medina, OH Lodi, OH Strongsville, OH

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Medina is home to the world's first ever Super Kmart Center [1]. The 24/7grocery/fresh foods/general merchandise store opened in 1991 and continues to operate today. However, and mainly due to Medina's boom in population throughout the 1990s, the novelty of having a Super Kmart soon wore off as other similar stores such as Buehler’s, Wal-mart, Target, and Tops Friendly Markets gradually became more popular and now apparently seem to be preferred choice of most Medina resident shoppers. In recent months Medina has encountered the arrival of other large retailers such as Borders Books and Music, Home Depot, Bed Bath and Beyond, and Pier 1 Imports. In October of 2006 Target reopened as a Super Target. Medina is also home to the A.I. Root candle company. They have been located in Medina since 1869. The Bil-Jac dog food company was founded in Medina in 1947. It is still locally owned and operated. -- Source: Wikipedia.com

Ohio 2000 Census Population Profile Map

	Medina	Ohio	United States
Population	25,139	11,353,140	281,421,906
Median age	33.2	36.2	35.3
Median age for Male	32.3	34.9	34
Median age for Female	34.1	37.5	36.5
Households	9,467	4,445,773	105,480,101
Household population	24,618	11,054,019	273,643,273
Average household size	2.6	2.49	2.59
Families	6,688	2,993,023	71,787,347
Average family size	3.15	3.04	3.14
Housing units	9,924	4,783,051	115,904,641
Occupied units	9,467	4,445,773	105,480,101
Vacant units	457	337,278	10,424,540

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Owner Financing - Safety Tips

Local Information for Medina, OH

Latitude: 41.135899 -- Longitude: -81.864069

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