Process to follow for Owner Financing?

[Shane Miller]

New to REI. Working on first deal. The seller is willing to carry the note in the property, but I don't know the steps I need to take to protect myself.

After we agree on terms and write it up into a contract, Do I just take the deal to the title company and pay the closing fees? Is there more to it?

[Marco Bario]

Originally posted by @Shane Miller:

@Marco Bario

When you reference a ‘licensed third party’, what type of a business would this be? A bank? A lawyer?

There are many Loan Servicing Companies (FCI and Allied Servicing Corporation are two examples) that do nothing but service loans. Make sure the company you choose is licensed in the state where the property is located. Also many title or escrow companies provide this service. Some refer to it as "long-term escrow." 

The most you should expect to pay for basic loan servicing is less than $20/mo. It's not uncommon to split that fee with your borrower or negotiate for them to pay the full amount. 

Some servicers an upcharge for escrowing and disbursement of property taxes and insurance. I add to my loan docs that we will be escrowing and then have my servicer add the service.