MN HOMES CONTRACT FOR DEED

Sellers owner financing checklist

Minnesota contract for deed information-

Contract for deed financing is when a seller is willing to sell their property to a buyer for a certain period of time for specific amount and terms- for example a seller may sell their home for $250,000 on a cd for 5 years at a rate of 6% amortized over 30 years.

During the 5 years the buyer can pay off the contract or refinance the home – sell the property.

There isn’t a pre payment penalty for the buyer to pay off the contract at an early date. Owners always welcome an early payoff.

What is an advantage of paying off the cd early for the buyer?

The main reason is to save money.-Usually the rate on the cd is higher than a mortgage. Fha rates are extremely low. Conventional loans are also lower than the contract for deed rates. Cd rates are usually 1% higher than market rate.

Sometimes you run into an investor or a person who has a mortgage and they need to meet their payment or want to make a higher return on their investment.

Higher rates are great for the home -owners not just because they make more money it also gets the buyer to work harder in refinancing the contract. The buyer can save $100s of dollars when they refinance from a higher rate.

Things to check into when selling a home on a land contract is

1. Credit history usually is a great start.

2. Most people buying a property on contract have credit issues but that doesn’t mean you shouldn’t sell to them. People with perfect credit will get a mortgage from the bank so credit is a small part of the equation.

3. You want to know that they can refinance the property in 3-5 years whatever the contract date is. So debt can be an issue you want to make sure they don’t have 1000s of dollars in debt that will prevent them from refinancing the property.

4. Job history is a reason people may want to purchase a home on cd.

5. Relocation.

6. Verify funds.

7. Have a title company or lawyer draft the final contract.

8. Have a lawyer or Real Estate Broker writes the purchase agreement.

One thing is making sure the person writing the cd is experienced with contracts. It is very important to have a knowledgeable person draft the contract. There are a lot of things to know in a cd verses a standard mortgage.

9. Buyers may want to purchase title insurance.

10. We can help you sell your property..

We work with “contract for deeds “on a daily basis if you thinking of buying or selling a property with Owner financing/land contract in Minnesota or Western Wisconsin we can help you achieve the results you are seeking.

“”ONE THING YOU WILL WANT TO WATCH OUT FOR IS AGENTS OR SELLERS STATING THEY WANT YOU TO TALK TO AN INVESTOR VERSES THE SELLER OFFERING YOU FINANCING DIRECTLY”.

They will charge you more for the house and also a higher rate. We do have programs where you can pick out any home of your choice but it will cost you more money. We prefer to have you buy a home directly from the owner so you dont have to pay a premium on the contract for your house.

BOARDWALK PREMIER REALTY INC

STEVE VENNEMANN

651-334-8312

BROKER

Mnownerfinancedhomes.com