Beware! What No One Tells You About Owner Financing a Home

Are you considering owner financing to purchase your dream home? As interest rates rise, owner financing has become a popular option for many. But beware - it's not without its potential pitfalls! In this video, we delve deep into how owner financing works, the cautionary aspects to consider, and the importance of knowing exactly what you're getting into.

From the negotiation process to potential legal consequences, we've got you covered. We also share a shocking real-life horror story highlighting the risky side of owner financing. This story serves as a sobering reminder of the importance of vigilance and due diligence.

We explain why hiring a lawyer is crucial in an owner-financing deal and how it could save you heartbreak in the long run. Understanding the fine print and taking precautionary measures can go a long way in securing a safe and beneficial deal.

Remember, owner-financing deals can be great when done right. We're here to guide you through the process and ensure you're protected every step of the way. For more information or if you have any questions, please reach out to us. We're more than happy to assist you.

Stay tuned for more informative videos on our channel and don't forget to check out our other content on life and real estate in Montana.

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Disclosures: All opinions are my own. Sponsors are acknowledged. Some links in the description are affiliate links, if you click on one of the product links, I’ll receive a commission at no additional cost to you. As an Amazon Associate, I earn a small commission from qualifying purchases.

Will Friedner
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[tnasituning]

Also Make sure to go to the local town hall or their website to find out if there's any back owed due taxes on it before committing...

And usually what happens is after your 90 days of no payments (So if you don't make your fourth payment then the process begins where the house can be forfeited back over at that point... Usually after 120 days from first Missed payment is when the house can be repossessed by the owner who holds the paper/title deed on it...

Of course though, Just like you said, some may not want the house back and may go out on a limb to work out something still with you at that point

[lambertois]

Be aware that when you buy a property financed by the owner, the seller (the owner) has the right to choose his own attorney.
The seller's attorney will work in the best interest of the seller! That might not be good for you !
You must get your own attorney to protect your interest !

[walkmiles]

Thank you for this video. great information

[rajandseema]

This is some very very good / honest information .Thank you

[vegetablehead]

good advice. the horror story is the exception, not the rule, but is a great example of failing to perform the necessary due diligence. and regarding the 'fine print'. my added advice would be this: request a digital / electronic copy of the agreement, as well as a printed copy. and request that ALL type / font is no less that 12 pt size. NO exceptions! best of luck. i am currently considering making and offer on a property that will involve a request for owner financing.

[MsElaine]

Dodd frank doesn't allow balloons fir occupant loan. Sad occupants take such high risk. I buy rentals sub to, never a problem with the bank calling the loan. I buy into land trust, get POAs to manage the bank as the new "manager ".

Seller financing often is bad due to tooo high a price that you'll never be able to Refi out.

[Redhoss]

Thanks for the info Will! It’s nice to have someone willing to go the extra mile and inform us. You the man! Ronnie

[cross]

Your like the "Great Oz" of information! Thanks for all you do!!

[EmotionallyExhausted]

There are some truly awful people in this world. Hire. A. Lawyer. Always. Very interesting, Will.

[cometcal]

Based upon what you said in the video, is the ideal FSBO one where the seller owns the house free and clear and can prove it with a valid paid up deed of trust?

[Lawrence_of_Asia]

That is a horror story though

How do you ensure the payments are made!??

[dwaynewladyka]

Very good information here. Cheers, Will! ✌️

[iamkaylania]

Thank you for explaining this! Are there any buyer financing companies that you would recommend? There are a few that I have been looking at and some of them I've been talking with but I'm not really sure if I should do it. Classic Country Land, Billy Land, and Discount Lots are a few. Thoughts?

[corbindallas]

Yea the odds of finding a homeowner that owns the house fully and willing to do financing seems very low.

[anthonydooley]

Owner financing is not the same as rent to own. A seller would still have to follow state laws for eviction and foreclosure, just like the bank. If there is an existing mortgage on the property, it's called "subject to the existing financing." The due on sale clause is there, but I have never heard of a bank exercising this, at least in the last 30 years or so. They could, but they probably won't as long as the payments are being made. Your horror story was not owner financing. If it was, the deed would have been transferred to the buyer's name. You are describing a rent to own deal, which I would never recommend as a buyer. Actual owner financing is no more risky than a bank loan. The only difference is that the seller has a lien on the property instead of the bank. The same laws apply. There are not separate laws for banks. Your language may confuse people because you are saying owner financing, but describing rent to own. Maybe you don't know as much as you think.

[timothyemerson]

Well if that's in Montana never mind I'm looking in Indiana Kentucky Tennessee areas for unrestricted land

[kdub]

Very interesting. I guess on the other hand laws seem to be more and more against landlords these days. Rona along with certain political movements proved to be a disaster for some landlords.

But this sounds like it could be better than flipping homes. The pool of buyers looking for owner financing is likely higher risk so one needs to be appropriately compensated while also protecting one's interests. If things fall apart there's still a risk of home trashing, wet cement poured down the toilet, or something worse yet.

[caspermlb]

What house is that in the thumbnail? Good advice. Thank you for the heads up!

[TeriHickerson]

I'm in an owner finance situation on my RV park in Florida and need to pull money out, how would you recommend I do this?

[CommunityPosts]

This is a very weird question (I'm having to ask it on this video because it is the most recent), but I went to Montana about a year ago and heard a great band play. It was around Glacier NP, but I don't remember which city. It was bluegrass, two girls (one played the guitar and the other played the fiddle) and they had a green, red, black, and white logo. Sadly, I don't remember the name of the band, so if anyone is willing to help me it would be very much appreciated.