In 2003, I bought 15 acres via owner contract- seven year note, 10% down, made sure I could build. At signing, the couple changed the contract to say that I could not cut any tree for any purpose and if I did the contract was null and void. I refused, because it would be silly- surrounded by trees and couldn’t cut my own firewood or make a trail. they changed it to “firewood for personal use” was ok. Next, they tried to stop me from building on the place two years in. Then, I was late on a payment by one day AND paid an extra 10% penalty and they filed to renege. I paid it off in 2010 and the former owner died just a couple months later- had he died before the contract was paid for, that would have been another case where I got nothing and they got the $ I had paid and the land. Moral of the story: cover your arse (and the sellers) and dont count on being lucky- get it all in writing.
I got seller financing on a commercial fishing boat. Was a $400k boat had $270k cash and he financed me $130k at 10%. Only took me a year to pay the loan off. I even paid all seller lawyer fees for the loan agreement. And then after the seller had received all his money he refused to sign over the boat. I had to take him to court to force him to sign over the boat and he only signed over the boat the day before we were due in court he dragged it out as long as he possibly could. What happened was he saw that I was so fair and generous I even paid all his lawyer fees for the transaction he saw me as an easy mark that could be cheated. It does not work when only one party has honor and integrity. Beware the crooks and thieves.
I got owner financing with $10k down, 7.5% interest amortized over 30 years, with a 3 year balloon payment. I had to re-fi in 3 years. It all worked out and that $135k is now worth around $650k. My seller had been a prisoner in a concentration camp and really helped me out.
Sadly there are quite a few scammers in the "owner financed" arena. While looking for land in East TN, I ran across some properties where the seller would only accept owner financing. They wouldn't even take a full cash payment(which I had). Talking with the real estate lawyer I was using, it turns out that some sellers will find any and every reason to claim you defaulted so they can resell the same property several times over. Often there will be language in the contract where missing a payment by more than 30 days is a default. All they really have to do is not cash the last check you wrote them. By the time you get your next bank statement and realize it you're is too late.
Washington Mutual did that to me on several house payments and refuse to accept the payments saying that they did not receive them when in fact they did so big banks are guilty of that as anybody but Washington mutuals down the toilet because that's karma
Working around the coming ESG scoring/mandates is gonna result in a huge increase in Barter, Owner-financing, and probably precious metal payment systems (when forced to bank ONLY with digital currency).
My first home i owner financed. Then the state bought me out to replace a bridge. Made enough to pay off the home and buy myself another home...after living in my second home for nearly 15 years I sold it to a neighbor on owner finance. My brother n law wrote up the contract for me and once it was agreed upon I received a $10k down payment. So it worked both ways for me as the buyer and then as the seller.
1. Have a lawyer draw up a lease with option to buy. Much easier to terminate a lease than to foreclose on a mortgage. Record the lease at the Probate Court to protect from "issues." 2. Have the legal title examined. 3. Have a land survey. 4. Have a written amortization schedule. 5. Never pay cash unless you receive a receipt 6. Buyer should expect a warranty deed (when paid in full). Record the deed.
The worst thing that can happen from a seller's point of view is that they actually sell their land in a lease option. The best part is that if one does this correctly, then the Option payment is non-refundable. Whereupon you can do it again to the next guy.
i sold some land like that 10 years $10,000 a year i hope it works out. i let him have a good deal he and his son are clearing it to farm and they will pay the taxes for the 10 year or when it is paid in full he can paid it off faster. if he wants to. all the banks are crooks now and so are most lawyers. take care, be safe and well.
The main reason a lot of banks don’t like to do raw land financing is collateral liquidity and monitoring, at least here in WV. Someone could finance acreage, timber it or dump junk on it, and let the bank take it back without hardly making a payment, which puts the bank in a position of trying to sell a stripped/junked hillside in BFE. That’s why you’re probably going to see terms like 65% LTV, so the bank is somewhat protected since a personal guarantee is just the bank’s right to sue.
As a Realtor, you can always ask for owner financing. The worst they can say is 'No'. The good Realtors will accommodate an alternative financing form for a buyer, and will do their job in explaining that offer to their seller(s).
Another story - My grandfather sold off the family homestead. My father was away working for a few weeks. When he came back home my grandfather told my father, sold. My father had put a lot of work into the homestead, built the infrastructure and so on. My grandfather sold outside just to spite my father. My father was in a position to easily pay for the homestead over just 10 years. My grandfather must have been a nasty old bastard to so betray his own son. He lived his last years in an old folks home.
Brunner Land company does, they sell in 4 or 5 Different States look on their website they will work with you I did and it worked out great they finance up to 20 or 30 years
I was offered (2022) to by my cabin, $10,000 down, 6% for 15 yrs. Total, 90K. I refused stating that the way our dollar is being devalued in 15 yrs the 80k wouldn't be worth 50K
Be careful. While it is true a seller who is unable to find a traditional buyer might be willing to go along with self financing, a lot of seller financing deals are a scam. The seller is hoping the buyer defaults so he can resell the property again (and again) and keep the downpayments.
Yeah - Having the pooch ride with you sounds great. UNTIL - You realize you're looking a hot breath face or a hairy wagging butt. Those dogs are soooo disrespectful.🙄😂😂-KJ
In 2003, I bought 15 acres via owner contract- seven year note, 10% down, made sure I could build. At signing, the couple changed the contract to say that I could not cut any tree for any purpose and if I did the contract was null and void. I refused, because it would be silly- surrounded by trees and couldn’t cut my own firewood or make a trail. they changed it to “firewood for personal use” was ok. Next, they tried to stop me from building on the place two years in. Then, I was late on a payment by one day AND paid an extra 10% penalty and they filed to renege. I paid it off in 2010 and the former owner died just a couple months later- had he died before the contract was paid for, that would have been another case where I got nothing and they got the $ I had paid and the land. Moral of the story: cover your arse (and the sellers) and dont count on being lucky- get it all in writing.
Thanks for sharing another world of seller financing. Bottle of Genie never know what's inside.
I got seller financing on a commercial fishing boat. Was a $400k boat had $270k cash and he financed me $130k at 10%. Only took me a year to pay the loan off. I even paid all seller lawyer fees for the loan agreement.
And then after the seller had received all his money he refused to sign over the boat. I had to take him to court to force him to sign over the boat and he only signed over the boat the day before we were due in court he dragged it out as long as he possibly could.
What happened was he saw that I was so fair and generous I even paid all his lawyer fees for the transaction he saw me as an easy mark that could be cheated.
It does not work when only one party has honor and integrity.
Beware the crooks and thieves.
I got owner financing with $10k down, 7.5% interest amortized over 30 years, with a 3 year balloon payment. I had to re-fi in 3 years. It all worked out and that $135k is now worth around $650k. My seller had been a prisoner in a concentration camp and really helped me out.
Sadly there are quite a few scammers in the "owner financed" arena. While looking for land in East TN, I ran across some properties where the seller would only accept owner financing. They wouldn't even take a full cash payment(which I had). Talking with the real estate lawyer I was using, it turns out that some sellers will find any and every reason to claim you defaulted so they can resell the same property several times over. Often there will be language in the contract where missing a payment by more than 30 days is a default. All they really have to do is not cash the last check you wrote them. By the time you get your next bank statement and realize it you're is too late.
Oh wow. What a trick. And very possible. Thanks for sharing. Very helpful warning to buyers even if they are careful.
Washington Mutual did that to me on several house payments and refuse to accept the payments saying that they did not receive them when in fact they did so big banks are guilty of that as anybody but Washington mutuals down the toilet because that's karma
Troy McClung. Wearer Of Many Hats.
Master Of Chickens.
Groundskeeper.
Sawyer.
Does it all.
Working around the coming ESG scoring/mandates is gonna result in a huge increase in Barter, Owner-financing, and probably precious metal payment systems (when forced to bank ONLY with digital currency).
My first home i owner financed. Then the state bought me out to replace a bridge. Made enough to pay off the home and buy myself another home...after living in my second home for nearly 15 years I sold it to a neighbor on owner finance. My brother n law wrote up the contract for me and once it was agreed upon I received a $10k down payment. So it worked both ways for me as the buyer and then as the seller.
1. Have a lawyer draw up a lease with option to buy. Much easier to terminate a lease than to foreclose on a mortgage. Record the lease at the Probate Court to protect from "issues."
2. Have the legal title examined.
3. Have a land survey.
4. Have a written amortization schedule.
5. Never pay cash unless you receive a receipt
6. Buyer should expect a warranty deed (when paid in full). Record the deed.
The worst thing that can happen from a seller's point of view is that they actually sell their land in a lease option. The best part is that if one does this correctly, then the Option payment is non-refundable. Whereupon you can do it again to the next guy.
Thanks so much for the valuable text Sheridan this video.
i sold some land like that 10 years $10,000 a year i hope it works out. i let him have a good deal he and his son are clearing it to farm and they will pay the taxes for the 10 year or when it is paid in full he can paid it off faster. if he wants to. all the banks are crooks now and so are most lawyers. take care, be safe and well.
Good luck to you , fir your generosity and for the new farmer
Good information Troy. I have sold and bought RAW land by owner financing. Never had a problem.
The main reason a lot of banks don’t like to do raw land financing is collateral liquidity and monitoring, at least here in WV. Someone could finance acreage, timber it or dump junk on it, and let the bank take it back without hardly making a payment, which puts the bank in a position of trying to sell a stripped/junked hillside in BFE. That’s why you’re probably going to see terms like 65% LTV, so the bank is somewhat protected since a personal guarantee is just the bank’s right to sue.
As a Realtor, you can always ask for owner financing. The worst they can say is 'No'. The good Realtors will accommodate an alternative financing form for a buyer, and will do their job in explaining that offer to their seller(s).
Excellent points Troy
Thank you for sharing your knowledge with us. Blessings😊
Another story - My grandfather sold off the family homestead. My father was away working for a few weeks. When he came back home my grandfather told my father, sold. My father had put a lot of work into the homestead, built the infrastructure and so on. My grandfather sold outside just to spite my father. My father was in a position to easily pay for the homestead over just 10 years. My grandfather must have been a nasty old bastard to so betray his own son. He lived his last years in an old folks home.
Yes, i would love to find someone i could owner finance some land or farm. Maybe one day.
Brunner Land company does, they sell in 4 or 5 Different States look on their website they will work with you I did and it worked out great they finance up to 20 or 30 years
Where you at? The guy we bought our land from has lots more.
Thanks!❤
Troy what are your thoughts on "Deed of Trust" vs "Land Contract"? As in the buyers perspective.
I was offered (2022) to by my cabin, $10,000 down, 6% for 15 yrs. Total, 90K. I refused stating that the way our dollar is being devalued in 15 yrs the 80k wouldn't be worth 50K
Be careful. While it is true a seller who is unable to find a traditional buyer might be willing to go along with self financing, a lot of seller financing deals are a scam. The seller is hoping the buyer defaults so he can resell the property again (and again) and keep the downpayments.
Who Drafts the buyer contract? What about a Quick Claim deed if its a cash sale?
Buyer should want a warranty deed, not a quit claim deed.
Yeah - Having the pooch ride with you sounds great.
UNTIL - You realize you're looking a hot breath face or a hairy wagging butt.
Those dogs are soooo disrespectful.🙄😂😂-KJ