I looked into it a few months ago. I'd suggest consulting with a real-estate attorney, but the gist of it is that the buyer gives you a small or no down-payment, and starts making payments on a standard amortization (principal and interest) schedule. If they default, you evict them and keep the payments they have made as rent. Otherwise the idea is that at some point they refinance into a conventional mortgage, and whatever principal they have already paid to you reduces the amount they need to finance.
You would normally write the contract with a balloon payment after 3 - 5 years, so that you can get your equity out by some known date. Contract sales are a legitimate way to buy/sell real-estate, but I'd be inclined to have a lawyer set it up. It should be mostly boilerplate for a real-estate lawyer and not too expensive. If you yourself have a mortgage on the property, it gets more complicated. On almost all mortgages, a contract sale will trigger the "due-on-sale" clause, meaning the mortgage holder *could* call your mortgage. They might not, and probably wouldn't if the loan is in good standing and the rate is at or above the current prevailing rate. But you have that sword of damocles hanging over you. Allan On Wed, 29 Dec 2010 11:44 -0800, "LWB250" <lwb...@yahoo.com> wrote: > Anyone here have any experience with this sort of real estate > transaction? > > I ask because we have had a couple of potential buyers ask us about these > means, and so far we have dismissed them, as we don't want to be stuck > with the house over time - we want an outright sale so we can get our > equity and move on and purchase another home. Things being what they > are, this might be an alternative means of getting someone on the hook > and ourselves out from under the place. > > I would be curious to hear any pros/cons of going this route. I can't > see anything positive about it myself, but I am not familiar with either > method of sale, so I figure I need to do some homework. > > Dan > > > > > _______________________________________ > http://www.okiebenz.com > For new and used parts go to www.okiebenz.com > To search list archives http://www.okiebenz.com/archive/ > > To Unsubscribe or change delivery options go to: > http://okiebenz.com/mailman/listinfo/mercedes_okiebenz.com > _______________________________________ http://www.okiebenz.com For new and used parts go to www.okiebenz.com To search list archives http://www.okiebenz.com/archive/ To Unsubscribe or change delivery options go to: http://okiebenz.com/mailman/listinfo/mercedes_okiebenz.com
