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Buying or Selling a Home/Owner Finance
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Question
I live in South Carolina and I recently completed a chapter 13 bankruptcy. I have been renting a house (from my brother-in-law) for 6 years and my wife and I have decided we want to purchase the home. I know I need to wait a couple of years before I am considered for a conventional mortgage, but I was curious if owner finance may be a better option. My brother-in-law is willing to do this, but I want to make sure that i am getting all of the benefits of home ownership,in particular the tax benefit on the interest paid. How would I go about formalizing an owner finance agreement to ensure all of the benefits of home ownership?
Thanks!!!
DARIN--
The BASIC difference between Owner Financing and a Conventional or Government-Insured Loan is that with Owner Financing,the SELLER ACTS AS THE BUYERS "BANK" OR "MORTGAGE COMPANY!" As such, the Seller and the Buyer can establish the terms and conditions of the "loan!"
If your Brother-in-law is willing to sell you the Home via an Owner Contract, you and he should find a local State-Licensed Attorney who specializes in Real Estate Law. Ask the Lawyer to explain the advantages and disadvantages (including tax-related matters) of purchasing/selling by Owner Contract (from both the Buyers & the Seller's perspective) and then if you both want to proceed, you can have the Attorney help you negotiate a reasonable price & terms of the transaction,draw up the Contract and record the Sale!
Don't try to put an Owner Contract-type Purchase/Sale together with ANYONE without legal opinions/assistance from a qualified Attorney! GOOD LUCK!
--JIM
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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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