Posted by AL on May 29, 2000 at 16:27:12:
I am assuming the property appraises for more than $400,000.
If someone offers them, full asking price of $400,000 and your parents are willing to take back a mortgage for say…10%. i.e. $40,000. Then the buyer can use this amount as thier down payment.
If the people that buy the house default, your parents should have the right to foreclose on the house, or to take the property back without a foreclosure process.
Is the loan assumeable? If this is the case, the assumption fee would be small as compared to a down payment of ‘x’ dollars.
They could ‘lease to own’. i.e. basically renting out to a family (prequalified…references…credit check…etc.), with a portion of the monthly amount going toward the down payment.
At the conclusion of the lease period, the people buying will have a credit history of good payments on the property and have the amount that your parents set aside for down payment. NOTE: your parents could increase the sale price of the house the same amount as the down payment, thus allowing them to get more from the property, and allow someone to get into the house who doesn’t have that much down payment, but can afford the payments.
You might read a book by Ron LeGrand, Fast Cash with Quick-Turn Real Estate. I don’t know if the libraries carry this type of book.
These are some suggestions, without going into great detail.