7 Keys to Success When Buying A Home WIth Owner Financing‏

I hope you're having a great day, I wanted to send a quick email about some important keys to a smooth owner finance transaction.

As with anything in life, having a team of experts in your corner will ensure you don't fall through too many traps and make unnecessary mistakes that could have been prevented.

Owner finance transactions are no exception. I have created a team of people I work with to get experts in ever field on our side once we find a a home and write up an offer contract.

These people are incredibly important to have in our corner to give you the most leverage and the most protection.

1. An owner finance specialist.

This one is easy, cause that's me... :-)

There are many different variations of owner finance transactions and many sellers will SAY they are offering owner financing but in reality, you aren't getting legal title.

Examples of these transactions are things like Land Contracts, Contract For Deed, Installment Contract, Equity Holding Trusts, Rent To Own, Lease Options or Lease Purchase, among others.

By working with someone like me, who specializes in owner financing, I can explain the differences in each of these transactions and offer recommendations to help you make educated decisions on which one might be best for you.

2. A Lender or mortgage broker.

Having a lender on your team will not only help you win favor with the seller, but it will ensure a higher rate of success in your mission to get refinanced within the terms you agree to in your contract.

This will be especially important when you want to make an offer on a home for the following reason: If you are competing against any other buyers for the same property, this one thing alone can give you the upper hand.

3. A Credit repair company.

For anyone who needs help improving their credit, hiring a credit repair company is going to give you more leverage when making an offer on a home. Plus, it will give you peace of mind.

Many buyers get incredibly overwhelmed with the process of repairing their credit. They think they can do it on their own but suddenly 2 years have past and they never found the time to sit down, write all the letters and keep up with the timelines of each credit bureau.

On the other hand, buyers who hired credit repair companies to help them were many times in a position to be able to refinance within 12 short months.

4. A Real Estate Attorney.

This is the most important one of all, and rest assured, I have a real estate attorney on my team! This is absolutely imperative that we are working with an attorney who specializes in these transactions because attorney's who specialize in owner financing will keep up to date on all the state laws and ensure we are all protected.

5. Title companies.

Most of the time, I do my closings in an attorney's office but it is very important that if we aren't closing at an real estate attorney's office, then we need to close at a title company. Again, this is just another layer of protection for you.

Title companies are required to have licensed closing agents and attorneys on staff and they will act as a neutral third party witness to the contract in case there are any future disputes.

6. Third-Party Servicing Companies.

I think I mentioned this to you the other day in one of my emails. A third-party servicing company is responsible for all incoming payments pertaining to the property and they distribute the money to the appropriate parties. This is the most reliable way to go in any owner finance transaction to protect yourself and be able to track and prove all the payments you have made.

Many companies also maintain escrow accounts and make the annual payments as needed.

What I love most about this is that it takes a ton of responsibility off both the buyer and seller to ensure all parties are abiding by the contract terms. It also makes it easy for buyers and sellers to follow up on any questions they have to make sure everything is being handled as it should.

7. Insurance agent.

Working with an insurance agent who knows how to prepare a homeowners insurance binder in an owner finance transactions is absolutely critical.

When you find a property, we are going to discuss the two options you have with homeowner's insurance. The first will be to add yourself to the existing homeowners insurance policy as an additional insured.

The second option is to acquire your own homeowners insurance policy and list the seller as either the primary loss payee or secondary loss payee depending on if there is an underlying lien.

I personally recommend option #1 for a couple reasons. First, it's simpler, second, it saves you money at closing and third, there is no real danger of raising any flags with the bank when they see a insurance policy change.