Owner carry question

[Jody Hawkins]

I have a cheap little house. I have 50K in it selling at 65K. I have a buyer with 25K down that wants a 1 year loan @ 6% until they can get there affairs together for a conventional loan. I am almost seeing see this as a "Lonnie Type" deal, but with stick built house. I have done some owner carry's in the past, but usually with investors not occupants. Buyer is a bit timid concerning documenting income, but honestly the risk is pretty tempting with over 30% down which quite enough (and then some) for a complete rehab. Looking for open comments. Thanks Jody

[Bill Gulley]

Is this your primary residence and have you sold other properties with seller financing in the past, in other words, does the SAFE Act apply to you?

Either way, the buyer MUST agree to income verifications to see if they can actually buy as agreed. Many are skidish about doing so, but may open up to a mortgage originator.

If they put that much down and they don't have qualifying income and later they fight foreclosure of any kind, you could end up giving the money back, so they need to prove income.

Sometimes you will get those working on the side and don't report income, which is the reason for hiding money. If they do that they can not join the world of regular, honest folkswho play by the rules and own a home, unless they show enough to buy.

Beware too that those with illegal activities, like drug dealers, will not want to show where money comes from. People who have sold assets to such folks can get caught up in money laundering schemes and not know it.

I would suggest that you find a mortgage originator, even if the SAFE Act does not apply to you. Also, ensure the loan is serviced by a third party.