Can you give me some owner-carry advice?

MOST OF THIS POST CONSISTS OF A CONTRACT SO DON’T FREAK OUT AND “TL/DNR!!!”

My husband seems fond of the idea (with us being the ones doing the carrying) but I’ve always been dead set against it.

We have some property, 5 acres, no house, we’re selling for $35,000. Showed it to a couple this morning. They asked if we would do an owner carry. I reconsidered my resistance to the idea when they said they’d put $17K as down payment. They asked if we’d “wait” for the rest. She’s expecting a settlement from a car accident. I didn’t talk to them myself, my husband did, so I have yet find out if the settlement is a sure deal, or if it is still pending.

$17K would pay off the mortgage as well as another loan which would free us up considerably.

I found the following contract on line. Need to tweak it to fit our needs, but I have a few questions.

♥ Do we need to get it appraised, or can I just take that part out?

♥ Also, I added the word “Non refundable” to the down payment. Is that valid?

♥ How do I go about getting an actual sales contract?

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Here is the contract:

Owner Financing Mortgage Contract

This agreement is entered into on the __________ day of __________________,

20____ between __________________________________________ (hereinafter

“Owner”) and _____________________________________________ (hereinafter

“Buyer”) for the sale of the property located at
_____________________________________________________ (hereinafter

“property”).

At all times the laws of the state in which the property is located govern this contract.

This contract is not a sale contract for the property. A separate sale contract for the

property must be entered into and executed according to the laws of the state in which

the property is located.

Loan Terms

This contract establishes that Owner shall sell and Buyer shall buy the property and

that Owner shall finance the balance of the purchase price for the property for Buyer

after Buyer delivers a non-refundable down payment.

The purchase price of the property is ______________________, as agreed to by the

parties to this contract. This amount was agreed to after an appraisal of the property,

which occurred on _________________________ and was conducted by

_________________________________.

Buyer is/is not (circle one) obtaining financing for any portion of the purchase price of

the property from a third party, such as a bank.

Buyer must notify Owner of the amount of financing obtained from any third party and

provide the name and contact information of the third party within 30 days of obtaining

such financing.
The down payment amount of _________________ has been agreed to by the parties

and is to be delivered no later than __________________________, 20_____. Failure

to provide this down payment nullifies this contract in its entirety.

The amount that Owner will finance for Buyer for the sale of the property is

_____________________(hereinafter “Owner finance”).

Owner shall carry the promissory note for the entire mortgage term for the amount

identified as Owner finance. Buyer has submitted a mortgage application to obtain

this financing and Owner has approved Buyer’s finances.

Financing for the mortgage is to last for a period of _________________ and carries an

interest rate of ________________. This interest rate is/is not (circle one) flexible

according to the mortgage rate index chosen by the parties. The parties have chosen

______________________ as the mortgage rate index to govern this contract. Any

changes to interest rate can be made solely by the Owner , but must be provided in

writing no less than ________ days prior to the change coming into effect.

Payment for the mortgage is due monthly in the amount of ______________________.

This amount does/does not (circle one) include taxes, insurance, and legal, state, and

other fees associated with owning the property. Should this amount include these fees

and should these fees change due to changes in rates being set by the governing party,

such as the state tax authority, the parties will notify each other of any changes that are

brought to their attention within 30 days.

Prepayment of all or a portion of the financing extended to Buyer is allowed and carries

no penalties.

This agreement is secured by the home. Buyer’s failure to pay the mortgage payment

when due as described above entitles Owner to initiate foreclosure proceedings as
allowed by state against Buyer.

Owner has the right to repossess the proper ty after the conclusion of foreclosure

proceedings, as outlined and permitted by the laws of the state in which the property is

located.

Loan Servicing Owner will/will not (circle one) hire a loan servicing company to draw up

the mortgage documents and handle the processing of payments. The selection of the

servicing company is solely at the discretion of the Owner.

Any fees charged by the chosen company for servicing the loan will be handled directly

by the Owner.

Owner reserves the right to hire a servicing company at any time. Notification of the

choice of servicing company will be provided to the Buyer no later than 30 days before

payment should be sent to the servicing company.

Owner may change servicing companies at any time without giving prior notice to

Buyer. However, Owner must notify Buyer or have the new servicing company notify

Buyer of any changes to choice of loan servicing company at least 30 days prior to the

change in mailing address for monthly payment. Any fees incurred due to the Owner’s

failure to provide Buyer with notice, either directly or from the service company, and the

Buyer’s sending payment to the incorrect address shall be paid by Owner.

This contract is full in its entirety. Any additions must be made in writing and amended

to this contract.

Entered into this __________ day of ________________________, 20_____.

_____________________________________________
Buyer
______________________________________________
Owner
Notarized or executed according to governing state law this ______________ day of
____________________, 20____.