Posted by Michael Morrongiello on March 05, 2000 at 21:37:08:
Brian:
Here are just a few clauses or concessions you might strive to negotiate into your contract where there is seller financing involved. If you can only get a few or even none accepted then don’t worry. The terms you have with that seller financing are a winner by themselves.
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First right of refusal clause is to purrchase the seller carry back mortgage in the event the seller wishes to sell his owner carry back mortgage in the future.
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Substitution of collateral clause would alow you to subsitute other real estate collateral of equal or greater value to secure your mortgage with the seller
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An exculpatory clause - Limits your liabiliity to the property itself and not you personally or other assets
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Right to make yearly prepayments on the mortgage for a 10%-15% discount off the total yearly payment amount. Allows you to invest your funds into a high yield type investment- the debt you are paying on
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120 Day default clause instead of standard 30 days
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Right to prepay the note without penalty
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Assumability rights or no due on sale clause - allows you to either have someone else take over your loan or to “wrap” the mortgage and provide financng to another buyer.
Hope these help…
Michael Morrongiello