How to Avoid Owner Finance Scams

I just wanted to send another quick email to review some of the things you SHOULD be asking when we are out looking at homes.

We can discuss a lot of this in more detail if you have questions, but I wanted to get a head start so that you can be thinking about some of the things that we will want to watch out for.

Question: Do I get the deed?

As I mentioned earlier, owner financing transactions do give you the deed to the home and that is critical for your protection as the buyer. Homes that are advertising rent to own, lease option, land contract etc do not give you the deed. This is critical for you to understand to avoid owner finance scams that say you're getting full ownership rights when in fact, legal title is not being transferred to you at closing.

Question: What liens are on the property?

This is an important question because you will want to make sure all liens that are attached to the property have been fully disclosed before closing. there are no other liens attached to the home except the mortgage. Some examples of liens that may be attached to the home other than a mortgage might be judgements, IRS liens, vendors liens, etc.

The reason this is so important is because when we close on the house and title transfers to you, any liens on the property will transfer with the title which means you are stuck with them.

Of course, we will get a title search done before we close but this will save us time if we get all of this information up front.

Question: What are the terms of the balloon payment?

If you already read my free report, you'll remember that I discussed making sure you have a loan extension clause and an appraisal clause in the contract. These are all terms that are tied with the balloon payment.

It's important that we make sure that your balloon is long enough to get the home refinanced and has the necessary clauses to protect you from unforeseen issues.

Question: Will I have the right and the time to get a home inspection?

Inspections are really important to make sure there isn't anything seriously wrong with the property that isn't obvious when we go see the home.

Whenever we write up an offer, we will want to make sure you have the opportunity to get an inspection done before you commit any serious money in a contract.