Seller Financing 101

[Nicholas Arcidiacono]

Hey BP Community,

Looking for details surrounding Seller Financing.... I'm still a bit confused on how it all works, especially if the seller has no mortgage on the property. What's involved, deposits, contracts, attorney's, title companies, etc...?

So, if someone can kindly take me to school on this subject end to end that would be awesome! 

Thanks in advance,

Nick

[Randy Rodenhouse]

Here are the typical process:

1. Negotiate the Terms- Agree on a selling price, down payment amount, interest rate, and length of the loan term. 

1. Hire an attorney to draft the legal documents and ensure your interests are protected. This includes the promissory note and mortgage or deed of trust.

1. A title company or closing agent will handle the closing process like recording the mortgage or deed of trust and getting the proper deed.
   

1. Set up a payment schedule and automatic bank drafts. Late fees should be outlined in the promissory note.  Make sure no prepay penalties if payoff early.  Try to get a non-recourse note if possible.