Owner Financing Lot - Buyer Building Home - Gotcha's?? - Posted by Greg Karr

Real Estate Investing Real Estate Financing
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Posted by Blane (MI) on April 14, 2000 at 07:50:13:

Hi Greg,

Others will follow I’m sure with better advice, but it would be a mistake to do anything without it being approved and in writing. Let her back up her opinions with facts, because that’s all she’s given you so far. You want to minimize possible problems down the road. You are in control here, and if it’s not done to your satisfaction, don’t let her do it.

Good luck

Blane

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Owner Financing Lot - Buyer Building Home - Gotcha’s?? - Posted by Greg Karr

Posted by Greg Karr on April 14, 2000 at 06:19:23:

I am selling a vacant lot and providing owner financing. The buyer expects to build immediately, and finance both the lot and the house upon completion. She claims she is pre-approved by a mortgage broker and won’t have any problems being approved for the loan. Are there any specific “things” I should do to cover myself during this transaction?
Here are a few facts that may be pertinent:

  1. I own the lot free and clear - no liens against it’s title.
  2. The lot is located in Comal County, Texas
  3. Negotiations to date have been verbal only. We have verbal agreement on purchase price, down payment, and monthly payment.

What happens if she builds and then does not qualify for the financing?

Thanks for your help.
Greg

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Re: Owner Financing Lot - Buyer Building Home - Gotcha’s?? - Posted by Ben in Ohio

Posted by Ben in Ohio on April 14, 2000 at 12:26:54:

Generally the construction loan wants the lot for collateral. You can subordinate the lot, ie, second position. It can be a problem if the construction is botched. Who is building the house? If it’s the buyer acting as general you want to know that. Call the mortgage broker and get the scoop.