Posted by Ed Copp (OH) on May 18, 2000 at 11:47:11:
Stacy,
The title company is going to be your best friend, here. Most if not all title companies have a lawyer on staff and many are owned by lawyers. They search titles, sell title insurance, prepare parerwork like notes, mortgages, deeds and so on. They usually will have the closing for you, at thier office.
Understand that there are a lot of things that have to be done the first time correctly, and most of us are just learning. The title company is in this business.
All you need to do is find a seller who is willing to sell to you on the terms that you and the seller agree to. That is your job here. Then write it down, preferably on a form (called an offer to purchase). You and the seller must come to an agreement, when you both agree then you both sign the offer and it becomes a contract. Take it to the title company and they will do the rest. They will charge for the work that they do. So ask up front how much they charge. Go do it…ED
Can someone PLEASE let me know what paperwork is needed when owner financing a property (I’d like to lease option to Tenant Buyer once I get owner to hold mortgage). From reading I’ve learned the following:
Use purchase & sales agreement (pro buyer, ie. inspection contingency…)
Get title insurance (seller to pay for)
Use escrow account to make sure mortgage payments are made.
ANYTHING ELSE?
Do I need a pre-executed deed signed by seller?
Do I need to record a mortgage document?
Changes in their homeowners insurance?
Any other documents I need signed?
Thanks so much. All of you have taught me SO MUCH.
Re: Question about owner financing - Posted by Ed Copp (OH)
Posted by Ed Copp (OH) on May 17, 2000 at 21:20:27:
Stacy,
First you need to find a seller who is willing to finance the purchase of his house for you. Then you both agree on the price and terms (a purchase contract). Title insurance is not required, but is a good idea. The term escrow account usually is used to desctibe a fund for the payment of real estate taxes and hazard insurance. Escrow account has no bearing on seller financing (it can be done with or without). Also what you are going to do with the property after you buy it has nothing to do with the owner financing paperwork.
NOW, about the paperwork required for an owner financed purchase (by you).
The seller will give you a deed, and take back a note and mortgage from you. That’s it (in a mortgage deed state).
All the other stuff like recording, and various kinds of insurance takes place so each party is somewhat protected, But the basic is the seller gives you a deed and you give him a note and mortgage…ED
Sorry for such stupid question but I’m trying to understand exactly what I need to do from start to finish if seller agrees to financing. Most sellers won’t understand how to do the paperwork and I’d like to seem as confident as possible.
OK…
Have price and terms on purchase contract
Deed (signed by seller to be held in escrow)
Mortgage & note document (can I use a standard mortgage document from Bronchick L/O course?
Will title company do all this if I just take deed and purchase agreement to them?
Do I record the mortgage at the courthouse?
Do I have the owner change homeowners insurance or do I buy new insurance in addition to sellers?
Do I have closing costs?