Re: newbie’s question for experts: - Posted by Tim Fierro (Tacoma, WA)
Posted by Tim Fierro (Tacoma, WA) on March 07, 2002 at 22:33:39:
If the buyer pays 6 months, then decides not to pay while you foreclose on them; do you have reserves for this?
If the buyer starts tearing the place up and then decides to walk out on your contract, do you have reserves to fix everything back up?
Get some money up front from the buyer, and screen them. If you are going to sell on contract as owner financing, you are now the bank to these people. The $400 a month is nice, but do you have reserves, are you aware of your role as the financier in this transaction, do you know the laws in your area about evictions vs foreclosure, do you have solid contracts to deal with owner financing, are you sure you are making money with $0 down and only selling it for $6k more than what you paid for it?
I don’t know your area, but looking at it like what you have posted, the buyers have no stake in the house. $0 down and high interest. If they find out in 6 months that they could get financing at 7% in a different area near their work, and now they have $5k saved up; they may be the kind of people to walk out since they are out nothing. I would want something.