Question: what is the best way to do owner financeing?
any suggestions or legal advice for me. I am thinking on selling my home and doin owner finance. It seem like a no brainer, why let the bank make all the interest when I could. however I understand it is rare? so is there something I do not know. ?
Answer: You will record a note and Deed of Trust. The Deed of Trust secures your interest as a senior lien holder against the property. The note is the financing instrument that spells out the payment schedule and remedies against default. I can send you a promissory note to use for the financing part and a sample Deed of Trust to examine if you e mail me for them.
You will not use the one I send you but will have escrow prepare the legal one for you. You can use the one I send as a template for them to follow your requierments from. They will of course also need a sale agreement that I can also send you. This is not rocket science but reading the forms that will be used ahead of time does help a person to better understand them. Make sure you and the buyers understand all terms and conditions before signing anything. A real estate attorney or escrow company can close your deal for you. I agree with you regarding banks making all the money and more sellers should offer financing if they can. Your property must be free and clear to offer complete seller financing. The buyers searching for such deals are often credit challenged so many sellers have not offered it the last 8 or so years. Interest rates and easy qualifying programs have placed many buyers into traditional financing also. Make sure you review the buyers credit and refuse financing to anyone with a bankruptcy or foreclosure in their recent past. You do not want to have to foreclose on a deadbeat that knows how to work the system. Make your note a fixed rate 30 year with a stiff 5 year prepay. That will scare away the flippers and most scammers.