Anyone ever Carried paper on a residential sale?

[Tank]

Pros and cons?
Would you do it again?
Details?

Thanks.

 

[MK1MOD0]

Yes. We have done it before. Just be sure to have a good attorney draw up the paperwork, and be sure you REALLY know who your are loaning to. Pretty easy to do now a days with the internet. And yes, I would do it again.

 

[gqchris]

I think @2FORCEFULL has done this several times.

 

[LuckyStrike]

Yes My First AZ House I Built

 

[Tank]

I think @2FORCEFULL has done this several times.

Maybe I’ll give Steve a call and pick his brain. Thanks.

 

[Tank]

Yes. We have done it before. Just be sure to have a good attorney draw up the paperwork, and be sure you REALLY know who your are loaning to. Pretty easy to do now a days with the internet. And yes, I would do it again.

I most likely wouldn’t “know” the buyer. Other than credit check.

 

[MK1MOD0]

I most likely wouldn’t “know” the buyer. Other than credit check.

For a small fee a Private eye / background investigator can find out a ton of info for ya. Worth it in my opinion.

 

[D19]

Yes. Add a subornation clause.

Many escrow companies can do the loan servicing for a small fee that you make the borrower pay anyways.

Do a lot more than a credit check. You want all the same documentation as a bank would, verify employment/ review P&L (self employed), background check and etc.

In this market, if you must carry in order to sell, then you're probably asking way too much. Unless it is due to condition, age, type or use? Trying to avoid tax?

 

[Tank]

Yes. Add a subornation clause.

Many escrow companies can do the loan servicing for a small fee that you make the borrower pay anyways.

Do a lot more than a credit check. You want all the same documentation as a bank would, verify employment/ review P&L (self employed), background check and etc.

In this market, if you must carry in order to sell, then you're probably asking way too much. Unless it is due to condition, age, type or use? Trying to avoid tax?

There’s an assessment on the HOA going on right now that scared off the bank. Kinda bummer as it was in escrow. So, option going forward would be to carry until it’s sorted out. Just an option looking into. Or cash buyer. Or find a bank that’ll loan. Another option is to just wait til it’s sorted. I’m not too hip on carrying paper. Kinda why I was asking about it to see if anyone had first hand knowledge.

 

[D19]

There’s an assessment on the HOA going on right now that scared off the bank. Kinda bummer as it was in escrow. So, option going forward would be to carry until it’s sorted out. Just an option looking into. Or cash buyer. Or find a bank that’ll loan. Another option is to just wait til it’s sorted. I’m not too hip on carrying paper. Kinda why I was asking about it to see if anyone had first hand knowledge.

Sounds like the lender's / title insurance concern could be that borrower will not be able to pay the assessment and HOA will attach a lien. Pending assessment or approved? If approved, are you able to pay the assessment? Is there pending litigation over this?

 

[Tank]

Sounds like the lender's / title insurance concern could be that borrower will not be able to pay the assessment and HOA will attach a lien. Pending assessment or approved? If approved, are you able to pay the assessment? Is there pending litigation over this?

No. Not that. No litigation. The association is under insured on the property. So the assessment is being added to bring up insurance coverage. Lender doesn’t want to lend if insurance isn’t up to par. We were considering carrying until buyer can get loan once assessment is complete.

 

[Racer56]

No. Not that. No litigation. The association is under insured on the property. So the assessment is being added to bring up insurance coverage. Lender doesn’t want to lend if insurance isn’t up to par. We were considering carrying until buyer can get loan once assessment is complete.

Extend the escrow contingent on completion of assessment and lease the property to the buyer on a month to month lease.

 

[Tank]

Extend the escrow contingent on completion of assessment and lease the property to the buyer on a month to month lease.

That’s kinda the same as carrying paper, no? Plus lender doesn’t want to lend while until insurance is up to par on property.

 

[Racer56]

That’s kinda the same as carrying paper, no? Plus lender doesn’t want to lend while until insurance is up to par on property.

No in the sense that you are not the leader just the landlord. This scenario would work if the insurance assessment and financing could be worked out in 90-120 days.

 

[Tank]

No in the sense that you are not the leader just the landlord. This scenario would work if the insurance assessment and financing could be worked out in 90-120 days.

Yeah but lender was like “no go”. So already fell Out of escrow. Should be all up to snuff by end of year. We’ll see I guess.

 

[bonesfab]

That’s how I bought my house I am in now. My buddy owed a little on it. Gave him some cash as a down and he payed off the note. We went to we the people and did the paper work and he gets a check eve month from me. I have also known him for 25 years.

 

[LuauLounge]

Was on the borrower side on two different properties. One was a long term second, which turned into a short term as we hated the area. Other was a short term to avoid PMI, which the agent carried in lieu of commission. Both worked out fine for everyone involved.

 

[boatpi]

1950 Willis!

 

[ChiliPepperGarage]

When my ex and I split up years ago we sold a house and carried it. Buyers had bad credit (supposedly for medical bills) but had some cash. Had a real estate lawyer write up a contract. It was a good deal for us as we got a good chunk of cash up front and had a positive cash flow each month.

They were in the house for two years making the payments. Then one day my ex called (they made the payments to her) and told me the buyers were moving back east because they had both lost their jibs and were going to default on the loan.

She was very upset about it. I told her it was a great deal for us. We got money up front and they made payments for two years that put more money in our pockets and now we can sell the house again. The real estate market had taken off by then too so we made even more money when we sold it the second time.

 

[OldSchoolBoats]

Maybe I’ll give Steve a call and pick his brain. Thanks.

Steve carried the note on our Havasu house for a little less than a year until we refinanced.