In today's market, owner-financed properties can be a big draw. Owners are able to sell their home faster and create a monthly income, while buyers can avoid a difficult lender search and put down a smaller down payment. This method of financing is also cheaper in that it can be done without the extra bank fees and attorney's fees. If you want to draw up a free owner finance contract, however, you should follow certain steps.
Instructions
1. Do your research. If attorneys aren't involved, you'll be your own advocate. Make sure you understand owner financing backward and forward -- you can read about this online at sites such as ioubuyer (see References for full link) or check out books from your library.
2. Decide upon the terms -- the term of the loan, amount of the monthly payments, and the interest rate. Also think about what you want to have happen if the buyer cannot make the payments. Check Bankrate.com for current interest rates so that you know what is both reasonable and profitable for you to offer. See Resources for link.
3. Find a form contract. This will facilitate the drafting of your contract and open your eyes to many of the issues you should address, and you can personalize it from there. You can find free do-it-yourself forms on sites such as wareseeker or others which you can find by searching on the Internet (see Resources for link) Just remember that you should address all the key points of the agreement between the owner and buyer. Do not rely on the form to be correct by itself -- ensure that it reads the way you want and need it to read.
4. Use your deed to ensure information is correct. One of the main issues you must address is the parcel of property being sold and financed. Reference your property deed to have the official description in your contract.
5. Ask for free legal help. There are a few legal websites like JustAnswer that allow you to ask legal questions of attorneys for free (see Resources for link). Law schools also have free legal clinics that may address real estate or contract issues. This is a great opportunity for you to find out the answer to the one or two confusing aspects that are holding up your drafting of your contract.
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