“Owner Financed” why and how toPosted: June 9, 2014
There are lots of reasons someone would offer to owner finance a property:
- Owner collects the interest instead of the bank
- No required appraisal or lender required repairs
- Easier to ‘qualify’ for the buyer
- It won’t pass lender health & safety issues
But there are some hidden dangers for the buyer, so if you are considering an owner finance do not buy anything that is done with ‘Quit Claim Deed’. Make sure to use a reputable title company to ensure ‘Warranty Deed’ (call me, I can recommend one), a licensed escrow agency, and be sure that reconveyance documents are signed at the time of sale to be held by the title or escrow company.
A contract for sale where title is transferred at payoff leaves a buyer vulnerable, as liens can be attached to the property (think IRS or Child Support) or the owner could pass away before title is transferred.
I personally buy and sell using owner finance options, but I also have spent a lot of time clearing title on properties that were done incorrectly with Quit Claim Deeds. Feel free to call me if you have any questions about owner financing your property, or buying an owner finance.