Owner Finance Property

after having paid more than 50% of the original price of the property, why would you deem it sensible to walk away and neglect the remainder? i know the value is lower than you had hoped...do you anticipate it will forever be that way?

remember, once the loan is paid in full, whatever you might sell this land for will be all profit and will negate part of what you paid.

i don't quite get the rationale.

Seller financing always represents a second lien on the property. This means that the mortgage holder has the first right to the home in event of a foreclosure and that their mortgage must be paid in full before any other cash is paid out from the sell of the home. In the case of steep price declines this could leave the original seller with nothing(Except the property if it is fully owned by the Seller) if the buyer chooses to walk away from the home.

I agree with George...I would not walk away after paying off 50% of the loan.

Hi rameaze,

It would be unwise of anyone to walk away from the property after having paid off 50% of the loan amount. The property value isn't always going to be what it is today. It will improve as time passes by and the real estate industry gets back on track. George has mentioned a good point in his post. Once you pay off the remaining balance on the loan, you own the property free and clear. So, when you sell off the property in future, it will be all profit for you with no debts or claims to pay off.

Thanks,

Jerry

Agree with every one here. If you have paid 50% already and are able to make payments, then hang on there.

Time will change and you will be thnakign your self for not leaving this property.

geni, your statement that seller financing is a second lien presumes that there actually is an institutional lender making a first mortgage. i believe in this case that the poster has only the owner financing and no other, which results in a first mortgage.

it is scary to see all these people willing to walk away from properties. this case is worse than most of the others, inasmuch as so much of the original debt has been paid already. it's alarming.

George tahnk you for makign the correction.

It is really scary and I have seen people with good credit and with ability to make payment walk away fromthier houses. Cannot blame them, since the vlaue of thier property has declined so much that they have to wait thier life time to recover all that money.

The above poster is really in a good shape and after making 50% payment, it would be always advisable to keep the property.

This is for every one. If more number of people start defaulting just becuse the peopertyvalue has gone down, then it will take more time forthis market to recover. Only way to create a demand would be is to reduce the number of supply. Which can increase the demand and the will help you all receover quickely.

well put, geni. the impact on the overall market can only be negative if folk continue to walk away from their properties simply because they've lost value. it's not like we've never seen downturns in the market before. this has happened in the past, and it will happen again in the future, but as we ought to know by now, life is cyclical. why would we not expect the real estate market to be cyclical?

But still I donot know why the stock market is up. Unemployement is so high, production is down, Demand is less.

???

investors are scared that all of the forces at play in attempts to fix everything won't work.

Then it shoudl be down. whois buying the stocks.

I am suspecting this is a big bubble build before one more bust.

Every oen watch yoru money and your 401K!!

it's a lot easier for most folk to watch their 401K accounts because there's so little to watch these days.

Hahaah.

Its the other way George. It is scary to watch 401k accoutn, becasue it has so little in it.

I knwo people who refuse to open their 401k statements, because they do nto want to get a shock.