Posted on: 03rd Jul, 2009 02:13 am
Hello there
I live in England but my husbanc and I have a condo in AZ, USA which we are selling. A potential purchaser wants to use Seller carry back. I have done some research into this (we have nothing like this in the UK) and understand the process but can find nothing to answer the following question:
We have no mortgage on the property so I take it that the buyer would pay us direct. However, if he makes a down payment but then defaults on the other payments to us, what happens then? who owns the property? how do we get the payments out of him? this seems to be a grey area. I would appreciate some advice on this.
Thanks very much
Annabel Pearce
I live in England but my husbanc and I have a condo in AZ, USA which we are selling. A potential purchaser wants to use Seller carry back. I have done some research into this (we have nothing like this in the UK) and understand the process but can find nothing to answer the following question:
We have no mortgage on the property so I take it that the buyer would pay us direct. However, if he makes a down payment but then defaults on the other payments to us, what happens then? who owns the property? how do we get the payments out of him? this seems to be a grey area. I would appreciate some advice on this.
Thanks very much
Annabel Pearce
Hi min
You should draft an agreement with the help of an attorney regarding payments, late payments, default in payments and other required details. This agreement should include the benefits of both the seller and the buyer. Both the parties should agree to the details of the agreement and sign the document. This will make the agreement valid.
In future, if the buyer defaults on the mortgage payments, then you can take steps as mentioned in that agreement.
Thanks.
You should draft an agreement with the help of an attorney regarding payments, late payments, default in payments and other required details. This agreement should include the benefits of both the seller and the buyer. Both the parties should agree to the details of the agreement and sign the document. This will make the agreement valid.
In future, if the buyer defaults on the mortgage payments, then you can take steps as mentioned in that agreement.
Thanks.
Hi there
thanks very much for getting back to me so quickly. We would certainly do all the required steps as you mentioned but what happens if the person just stops paying? this is unlikely I know but if that happened regarding mortgage payments, then the bank would take control of the situation and re-possess the property. If it happens when the payments are being made to us, as we have no mortgage, do we then take possession of the property again? I hope this makes sense! Perhaps this is an issue that has to be drawn up in the agreement that you mentioned.
Sorry to ask what you must think are stupid questions. Must be the hot and humid weather we are having over here!
thanks very much for getting back to me so quickly. We would certainly do all the required steps as you mentioned but what happens if the person just stops paying? this is unlikely I know but if that happened regarding mortgage payments, then the bank would take control of the situation and re-possess the property. If it happens when the payments are being made to us, as we have no mortgage, do we then take possession of the property again? I hope this makes sense! Perhaps this is an issue that has to be drawn up in the agreement that you mentioned.
Sorry to ask what you must think are stupid questions. Must be the hot and humid weather we are having over here!
Yes annabel, you will have to include such clauses in your agreement. An expert real estate attorney will help you in drafting the deed in a proper way. You can check out the following page to know more about seller financing:
http://www.mortgagefit.com/owner-financing.html
http://www.mortgagefit.com/owner-financing.html