Seller Financing Question

[David Montore]

My sister-in-law and her husband are about to put their house on the market near Ft. Riley, KS instead of renting it out because they’re tired of the hassle of scummy tenants. I think she’s in the perfect position to sell via owner financing but I’m not savvy enough to give her the step-by-step. For a first timer would it be as simple as approaching a real estate attorney for help crafting the note and going from there? In paying an attorney for their time, is walking you through the process part of what you’re paying them for? I can’t think everyone is self-taught and learned by trial and error. I know there’s a learning curve with everything but I’d hate for them to miss out on a great opportunity because I didn’t convince them to at least try calling someone. Thanks for any advice!

[Marc Winter]

@Christopher Winkler I don't know the laws in your state, but in PA, having a non-professional investor (such as a first time buyer) sign a quit-claim deed to be held in escrow until such time they default on their payments--that's considered a 'confession of judgment'.  

In other words (in PA) it would illegally strip the tenant/buyer of any equitable rights they have in the property without due process. 

@David Montore if your sister doesn't want to deal with any more 'scummy' tenants, why would she want the deeper, longer-lasting potential complications of a lease w option, or a seller wrap, or contract for deed (land contract)?  After giving her all the other advice, remind her to think long and hard whether or not she wants to continue to be tied to the property and relying on another person to make the deal work, OR, if she'd rather sell it outright and be free of the whole thing.

Think about it:  just because you CAN structure a creative financing deal, doesn't always mean you SHOULD do that.