All Forum Posts by: Randon B.

Hi Rilicia,

PM me. I have a couple of letters that I'm more than happy to share. One is for homeowners who are in default and upside down; one is for homeowners who are in default but still have equity in their home; and one is for homeowners who have received Notice of Trustee Sale and their house is about to be foreclosed. 

Good luck. 

@Randon B.

Either provide no info or all info. Saying payments will be $500/mo is not good

Saying $500/Mo for 240 months based on a financed amount of $25,000 at 6% interest says everything

Make sense

You look very prepared. 

I've sold a dozen with SF and just used a title company. They have attorneys in their network that write 'mortgages' for a living for about $300. It will definitely have a DOS clause. A balloon is up to you.

Have a quality agent do a CMA to nail down your home's value and ask top of the range.

 You won't need a listing agent to find a buyer and if the buyer has one, add their fee to the price.  I state that in my for sale postings. 

@Randon B.

Seems like you've done your research and have your ducks in a row. 

Only addition I'd have centers around making sure that the property you have for sale lines up with the type of buyer who would likely use seller financing. 

As a rough rule, the most creditworthy applicants get the lowest rates since they have the least risk. Another rough rule is that seller carry rates are higher than traditional mortgage rates since the seller had concentration risk (they only have one loan and not thousands like a bank or GSE) and they have a higher cost of capital ( you want to grow your money whereas people who buy bundled mortgage loans have other objectives) 

All that to say, the buyers who will most likely find your plan attractive fall into the sub-prime category ( have some combination of bad credit/ no credit, filed for bankruptcy, or have been denied for a traditional "prime" loan). Nothing wrong with being sub prime, but if your home is in the top 5% for the market the odds you'll find a candidate fall drastically. If the property sits more around the starter then the plan seems great! 

@Randon B.

Depends. There are triggers. If you note a payment amount then absolutely must give terms of loan. 99% of seller financed people do not though

How do you go about ensuring that all the disclosure requirements are met? Is there a checklist or something?

https://www.consumerfinance.gov/rules-policy/regulations/1026/24/#d

@Randon B. thanks for posting.  Always great to hear from a fellow Texan.

So you are actually asking 2 different questions here:

1. Are there rules to advertising a "for sale by owner" property?

2. Are there rules to advertising a "Owner Finance" loan?

And there are rules to both.  Some rules are strict but most are pretty easy to comply with.  Now, there is a separate issue here - what are the rules to writing an owner financed loan in Texas?  I'm not going to touch on that very much but I'll give a little article you can read on it HERE.

For the For Sale by Owner try this website HERE.  You can also list your property there as well.

And for advertising your rate - just keep in mind that anything you advertise must be true and accurate.

Hope this makes helps in some way.  Thanks!

I state everything, interest rate, balloon, amortization, price. 

That's not correct, either way I wouldn't balloon it. The longer the loan term the more money you make and the longer you offset your taxes.