Florene Darr's Real Estate Q & A

REAL ESTATE QUESTIONS AND ANSWERS.

     Q.  Someone asks us if we would consider offering seller financing. Is this a good thing to do? What do we need to do to offer this?
     A.  
What you are asking is about doing a land contract with a buyer. That means you would be acting as the bank and collecting the interest for a certain period of time. This time would usually be a period of one to five years. From a financial stand point if you can do this it makes a lot of sense. Most of the first years in a mortgage goes to the interest. You would amortize the loan for a period of 30 years and have a balloon in one to five years. At that time the buyer would go out and get a new mortgage. There is one important thing you need to consider with this or with allowing someone to assume your mortgage. Do you have a mortgage? Does your mortgage document have a due on sale clause? If it does this means should you sell your property the mortgage company wants all of their money and can call your entire mortgage due and payable.
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