Posted by David Butler on June 27, 2001 at 15:18:23:
Hello Troy,
You’ll find the answers right down below here. We’ve had a lot of “on-point” discussion directly related to your several questions, under topics such as “Simultaneous Closing(s)”, “Creating Notes”, “Creating Notes to Sell”, and the most recent… “Preparing A Note for Sale” back on June 8th.
This last one you can easily scroll down too… the others, you might wish to use the thread titles and enter them in the keywords command in the Search facility at the top of this board.
This should plant you solidly on firm ground… and best wishes on completing this deal
Yesterday I was dicussing seller financing to a Realtor for a client of hers.
Basically, her client has a home free & clear and wants to sell now. I suggested to offer owner financing and have the sellers note sold @ closing.
She liked the idea, and thought her clients would be interested as well. But she had a concern about the ability of the note buyer having the funds there at settlement.
What can I provide to her / her client to help ease their mind that the money to complete the transaction will be there at settlement?
Troy:
Often a seller is reluctant to sell with owner financing if they intend to sell their note, because of the fear you suggest … What happens if the seller financed note & mortgage cannot be sold or converted to cash at the time of closing.
We have suggested that a prospective property seller who is willing to owner finance, as long as they can convert their financing into cash at the time the property is sold use a contingency clause or “weasel” clause in their sales contract with the buyer or as an addendum to their sales contract that both parties will acknowleged. If you will what this clause in essence states is something like this;
“this contract is contingent upon the property seller being able to sell their owner financed 1st lien mortgage & note at the time of closing in order to generate cash proceeds agreeable to seller otherwise the contract shall be considered null and void…the disbursement of funds shall take place at the same time the property closing takes place…”
Now a buyer and seller can confidently proceed forward knowing that IF the funds are not there and are not acceptable to the property seller, the seller can elect to void the contract and closing and walk away.
