“Weasel” to alleviate concerns… - Posted by Michael Morrongiello
Posted by Michael Morrongiello on June 27, 2001 at 18:48:46:
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.
Hope this helps…
To your success,