Owner Financing? - Posted by Brian

Posted by Michael Morrongiello on February 10, 2000 at 14:24:30:

It will depend on which foot the shoe is to be placed?
If you are the buyer and the seller (owner) is financing you, then you want to see if you can negotiate some of the following:

  1. No late fee on payments

  2. 60-120 day deafault clause, instead of the typical days

  3. No acceleraton clause

  4. No due on sale clause

  5. Substition of collateral provision

  6. Exculpatory language in the note = property serves as sole security for repayment, etc.

  7. First right of refusal to purchase the note

  8. The right to make an annual payment and obtain a discount of 10%-15% of what would be the monthly payment totals

The above list is by no means all inclusive…

If you are the seller (owner) that will hold the financing then with many of those options listed above you might want to take the reverse position.

Michael Morrongiello

Owner Financing? - Posted by Brian

Posted by Brian on February 10, 2000 at 13:31:17:

I was wondering what were some issues to whatch for in a deal where the owner will hold mortgage. I am aware of payment issues such as the owner not paying his mortgage if there is one. I guess a third party would be a good idea to solve that one. What else should I be looking for in terms. beside a good interest rate and 5 to 10 year payoff.

Any thoughts would help!

New York