Is Owner Financing a Good Idea When Buying a Home?
Hi Toby, Owner financing has a few pros and cons. It can be a good option if the purchase is handled professionally, but keep in mind that sometimes there is a reason the home is offered with owner financing. The seller may want to avoid the oversight that mortgage lenders typically require when financing property–things like inspections, appraisals, and legal purchase agreements. Follow these five steps to avoid a bad deal. 1. Make sure that your agreement has an appraisal clause–so if the property doesn’t appraise for at least the sales price, you are not obligated to complete the purchase. Buyers who skip paying for an appraisal because there isn’t a lender requiring it may substantially overpay for a property just because the financing was easy. 2. Use a standard purchase and sales contract, especially if no real estate agent is involved. If you have to pay a real estate attorney a couple hundred dollars to draw one up, do it. It is well worth the cost. 3. Look carefully at the l
