Owner Financing Question

[Chuck Brickman]

I have sold a number of rehabs via conventional financing but am new to owner financing and would like some advice. I live in Texas and am selling a single family home with a 65k list price. There is no mortgage on the property. I just received an offer, thru a realtor, to purchase the house for 65k, owner financing. Buyer would like to pay 10% down, with a 5 year balloon. Buyers wants me to pay title policy. In a nutshell, I'd be paying $3900 in realtor fees, about 600 for a title policy and about 1k in closing.

The buyer has a decent income with no credit, his wife has a fair income with excellent credit. I'm thinking of asking for more than 10% (15%?) and a 3 year balloon instead if 5. Also I would request a 1 year prepayment penalty.

Could I get some comments on the proposal? Also, what provisions should I ensure are in the contract?

Thanks in advance.