Seller carry back

Guest

Hello

I live in England and have a property in AZ, USA. My husband and I are selling our condo and a potential purchaser wants to use seller carry back. We have nothing like this in the UK and, although I have done some research, I cannot find any information to answer the following question:

We do not have a mortgage on the property so I take it that the buyer would pay us direct.

If he makes a down payment but then defaults on the other payments, what happens then? who owns the property??

Some information would be greatly appreciated.

Thanks

Annabel Pearce

jenkin7 · Posted: Mon Jul 06, 2009 12:37 am Post subject:

Hi Annabel,

Seller carry back financing helps buyers purchase a home, in case they do not qualify for a regular mortgage of the full amount of purchase price. In such situations, the seller carries a second lien on behalf of the buyer to help him buy the home. For instance, a buyer qualifies for a mortgage of only 80% of the sale price and can afford to make a down payment of 10%. He now can ask the seller to carry a loan for the rest of the 10% on his behalf. In this situation, the seller carries a second lien. Thus, in case of a default by the borrower, the first mortgage will be paid first and then the seller. Thus, it is important to check the buyer's credit and income before going for seller carry back financing.

You can also provide the buyer with a rent-to-own option. You can make a contract with the buyer, wherein he will be given the option to buy the property after a few years time at a pre-determined price. The buyer will pay you rent till the time he is able to finance and purchase the property. Once he qualifies for a mortgage, he can pay the pre-determined purchase price and take over the title of the house as per the terms of the contracts.

All times are GMT - 7 Hours

Page 1 of 1