10 Thoughts on Seller Financing from the Lawyer Drafting the Documents. Per Real Estate Lawyer Colin Newberry on the AREA Facebook Group

10 Thoughts on Seller Financing from the Lawyer Drafting the Documents. Per Lawyer Colin Newberry, posted on Facebook Real Estate Group, AREA the original Austin Real Estate Alliance

1) Most Seller financing deals are amortized at 20-30 years, but Balloon (become due in full) in 3, 5, or sometimes 7 years.
2) It is extremely rare to have the Seller be responsible for Escrowing Taxes and Insurance (D3 of the TREC Seller Financing Addendum).
3) Most Realtors don't know to have their Seller Financer have a Lender's policy added on the Title Insurance.
4) Interest Rates are all over the place for Seller Financing--Higher than Market if it is being done for someone who can't qualify for traditional financing, lower if it is an enticement to get a house sold.
5) Wrap mortgages/Subject-to Mortgages are extremely risky on both sides and not recommended for anything but investment properties, and really not even for that.
6) A Seller Financing deal should (on the Seller side) either not be assignable or should have SOMETHING filled out in Section A of the Seller Financing Addendum to ensure you're not loaning to a risky borrower.
7) Financing to an entity requires a personal guaranty.

The Addendum document is not the Loan Package, you have to get those drafted up by an attorney. (True story-I had an agent call at the closing table confused why they couldn't record the Addendum as the seller financing loan package).
9) Seller financing and Family Financing from the Buyer side result in the same document set, but Family Financing is under a Third Party Financing Addendum.
10) Lastly, Seller Financing is extremely popular right now, behind only Seller Buydowns.

As always I am always happy to talk about this subject or anything else my AREA People need. If there is enough interest I also would be happy to do a Lawyer Perspective on Seller financing zoom/facebook Live/Moving picture presentation.

Comments

Bonnie Fish McGee's Spooky 1st Birthday Party! Oct. 19th, 2024. Good times.

Austin, Texas has a DOG PROBLEM.....

Austin, Texas has a DOG problem (Letter I wrote and sent) Dear Austin City Council Members, Hello and well regards, Yesterday afternoon during a simple bicycle pedal exercise ride, I was physically chased by an unleashed Pitbull dog in ZILKER PARK. Then directly after recovering from almost being mauled by an unleashed pit-bull in Zilker Park, I attempted to buy a Gatorade at a nearby Barton Springs Road Market, but that didn't go well either, as an interior Market commercial customer had a massive mixed breed dog trolling through the diminutive shopping isles. Then this morning, at a Coffee shop on SoCo, there was only 1 entry way in and out, and there was another large, although more docile mixed breed dog. All of this has occurred in less than 24 hours. What's the point? The City of Austin's dog friendliness and citizen enabling of irresponsible dog owners has gotten out of control. Newsflash! Not everybody like dogs, being everywhere all the time. especially within ...

Keeping Up with ATX local and Real Estate Broker George Vance McGee....

So GVM, how are you feeling these days? What is the married, family man, new dad lifestyle? Thanks for asking. Believe it or not, despite my youthful glow and aura, I'm now "over the hill" at 42 years of age. Physically I still feel pretty darn good. I try to cycle often on the hike and bike trail of lady bird lake. I've even bought a bicycle rack for my 2010 Nissan Rogue SUV. As a Real Estate Industry person, I apologize if my lack of a Range Rover or Mercedes Benz car ownership doesn't suffice. In regards to health, being a newborn dad will really sober you up. Coffee has long since replaced booze in my blood system. When you routinely wake up circa 7:00 am to hug your baby daughter, change her diaper, feed her, have playtime and then drive her to daycare/preschool you need to feel healthy, rested and alert. 1 thing I do miss as a responsible married family man, is the carefree, outgoing, live music and bar hopping nightlife of Austin, Texas. Let's be hone...

Search This Blog