How can the seller make sure he gets the property back or forecloses the property if the buyer doesn’t pay ?
Im looking for seller financing contract but most of them only say the borrower pays a late fee..
3 thoughts on “How to protect seller/owner of owner financing ?”
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You get an attorney to draw up a note.
In fact, state law requires it to be drawn up by a licensed attorney or it’s not worth the paper it’s written on.
This is not the time to be cheap.
By law you are allowed to foreclose if the borrower does not make payments on time. However, many states have protections for mortgage borrowers (many different laws) and it may require 6-8 months before a foreclosure can be completed.
Also some states are non-recourse states which means that you may not be able to sue the borrower for any missed payments or any shortfall that occurs due to the foreclosure.
Generally people that require seller financing do not have a down payment and/or good credit making it a very risky venture for the seller.
Your best bet is to hire a real estate attorney who specializes in this sort of sale. If you don’t protect yourself the right way, you are bound to get screwed.