Buying or Selling a Home/Owner Finance, Inc.

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Expert: Jim Root - 11/4/2008


Question
Hi,
My husband has a spec home for sale and advertised for possible owner financing. We were contacted by an individual mortgage agent who works with Owner Finance Inc. to "flip" owner financed real estate contracts. I was confused by the explanation of the program; a contract between us and mortgage agent is drawn but never executed. He provides finance approval to buyer and 3% of closing costs in return for 10% of appraised value (assuming that is the sale price). The funds are distributed at escrow. Is this Owner Finance, Inc. company legitimate? How can they be party to buyer financing with no contract? This real estate market subjects us all to scams and it is difficult to get sound advice.
Thanks,
Cyndi

Answer
Hey Cyndi--

You say that you're confused at the explanation of "Owner Finance Inc's" program.And from your expalantion to me, so am I! True owner financing has the seller "carrying paper" on the purchase of a Home.

Typically, a "Real Estate Land Contract" and/or a "Contract for Deed" is used to document the purchase & sale  by price, terms and conditions.  If the Seller carrying papers is smart, he/she will have an Attorney help with the negotitions and writing & recording  of the Contract.

There are Companies that "BUY" "Land Contracts" and/or "Contracts for Deed" or "Seller-held Mortgages". They buy at DISCOUNTED prices and that's where they make their money (Eg. Seller holds an $80,000 Contract for Deed upon which there's now a $60,000 princiople balance owed. The "Company" pays the Seller $40,000 CASH for the Contract.)

From your explanation above, it doesn't sound like the "typical," buyer of Contracts, though. I'd be VERY WARY of this outfit myself! Suggest you check them out with the BBB in  your area, talk to local Realtors about them, and call the Agency in  your State that monitors FINANCIAL INSTITUTIONS! Every State has one--here in  Washington it's called the "Department of Financial Institutions." I'D CHECK THESE FOLKS OUT WELL BEFORE DEALING WITH THEM!

Good Luck!

--Jim

Buying or Selling a Home

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Jim Root

Expertise

How to select the right Real Estate Salesperson & Loan Officer--ones who will serve your best interests! House-hunting tips & suggestions on selection of the home best for your family needs. Introduction to the Home Buying Process & all the "Players" involved.What is of utmost important to the Homebuyer? Real Estate Contracts & Negotiations, Appraisal needs, Title Co. involvement, Home Inspection issues& the Closing/Escrow systems, etc. Whatever your question, the answer will follow, whether from personal knowledge or research! Gale, shown here with me, has been a Real Estate Office Administrator, licensed Realtor & has served as my Research Assistant over the years!

Experience

Over 30 years as a "Real Estate Professional." including Real Estate Marketing & Sales, Appraisal work, Mortgage Banking & as a Realty Officer with U.S Dept. of HUD's FHA Homeownership Division in Alaska, Washington & Idaho! Some experience in Montana, California, Utah & Nevada markets!Knowledge of National Markets by continuous Research!

Organizations
Former member of Nat'l Ass'n of Realtors (NAR) & Mortgage Bankers Ass'n of America (MBAA). Currently with National Association of Review Appraisers & Mortgage Underwriters (NARA/MU).

Publications
Published in various local, state, regional & national Real Estate-related magazines & newsletters!Co-author of various Govt. publications on Homeownership, Appraisals & Mortgages while with HUD/FHA.

Education/Credentials
Associate Degree in Real Estate Studies plus: Numerous Real Estate-related Courses conducted by the U. S. Government & Private Industry over the past 30 years. Bachelors Degree in Mass Communications, Masters Degree in Education/Teaching

Awards and Honors
Professional Designations: Certified Residential Originator (CRO) from MBAA, Registered Mortgage Underwiter (RMU) & Certified Review Appraiser (CRA) from NARA/MU. Outstanding Peformance Awards for 10 of the 12 years with HUD/FHA & numerous Sales/Listing Awards while a licensed Real Estate Agent.

Past/Present Clients
No longer selling/listing Real Estate, nor Appraising properties, nor working in the Mortgage business, this "Real Estate Pro" serves as Director of a Company that provides Professional Development Seminars & Workshops to the "Real Estate Industry" and provides free (as needed) & fee-paid (on a sliding scale) consulting & inspection services to members of the general public.Your questions will be answered without "salesmanship" & with your best interests in mind!

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