This family is happy because they were able to buy a home without jumping over the hurdle of getting a new mortgage. They assumed the seller’s already existing loan. Or they gave the seller a wrap-around deed of trust, with the seller to continue to make the payments on his existing loan. Or they entered into an unrecorded lease-option agreement for the purchase of their new home.
Either way, they got into a property sooner than they would have been able to otherwise. Maybe their credit was a little too low. Maybe they had a recent bankruptcy. Maybe they had a recent short sale. Maybe they had recent late mortgage or rent payments.
It is tough to get by these days. Life is backward. When you are old, you usually have more than enough money. When you are young and have kids and need the money the most there is not enough.
Or maybe they could have gotten a new mortgage but chose not to do so. Mortgages involve a lot of closing costs. Maybe they were able to get a better rate or lower payment by buying using seller financing.
Creative financing is usually synonymous with seller financing, although creative financing is a broader term.
Seller financing has been around for a very long time. Read about the recent history of creative financing or seller financing here.
Seller-financing is advantageous because it avoids the hassle of having the buyer get a new loan. There are only two parties to a seller-financed deal, buyer and seller, instead of the usual three parties. The lender is not there to rain on the parade. Two is company and three is a crowd – in love and in real estate transactions.
Are you are a seller having trouble selling your property? I can guarantee you that a big part of the problem is that buyers in general are having a hard time getting financing. This is reducing your number of potential buyers. Or maybe your property needs work and does not appraise for enough? If so, then why not eliminate the obstacle? Why not sell utilizing a lease-option or a wrap-around deed of trust or an assumption – with or without lender approval? I am good at getting lender approval. Why make the buyer go get a new loan? Let the buyer use your loan.
In the old days almost all residential bank loans could be assumed or “wrapped around” or “taken subject to”. Then in 1986 Congress passed the Garn St. Germain Act. The due-on-sale clause in paragraph 17 or 18 of your deed of trust became enforceable under federal law. Before 1986 many states, including Washington and California, regarded due on sale clauses as “impediments to sale” or “restraints on alienation” and therefore void, at least as to residential properties.
Most real estate brokers are afraid to “go around” a due-on-sale clause. Most brokers tell buyers they have to get financing so the seller can pay off his or her loan. However, seller financing can work, although it has to be done carefully and with full disclosure to all parties. It helps if your broker is also an attorney.
I think one way out of our real estate recession would be for the enforceability of due-on-sale clauses to be suspended or greatly relaxed. Seventy percent of mortgages are owned by Fannie and Freddie, and they could suspend enforcement of Paragraph 18 of the standard deed of trust with the stroke of a pen. I wrote to the president about this. I wrote to the president of Fannie, the president of Freddie, the secretary of the treasury, the head of the FED. So far only Ben Bernanke responded. He like the idea but said it was outside his jurisdiction.
In a seller-financed deal the buyer makes monthly payments to a collection service. The collection service pays the lender in the seller’s name and keep a record of everything. The collection service might hold an executed deed or a full reconveyance. The buyer will pay a reasonable down payment, sometimes even enough to pay for closing costs and commissions and maybe enough to cash out the seller’s equity in the property.
If you are a frustrated buyer, especially one having trouble getting financing, look for a seller who will carry the balance. You might find one on your own, and if you do, contact me and I will write up the deal and get it into escrow.
On the other hand, you are more likely to find a willing seller if you work through a broker. Tell your broker to look for a seller who will carry the balance. When your broker finds a willing seller, tell your agent to call me. I will help him “land the airplane”.
Bear in mind that VA and FHA loans are assumable, provided that the buyer proves credit worthiness by customary credit standards, which may be less strict than standards for new loans. A possible reason for the reduced strictness is that the seller is not released from liability, which means the lender will have two parties “by the hind leg” and liable to pay the mortgage.
If you are a broker working on a deal, don’t be shy about calling. I spend a lot of time on the phone with brokers at no charge discussing these deals. After an initial discussion, I can often quote a flat fee. I love to work with brokers. They butter my bread. Sometimes I take all or part of my fee at closing.
By the way, I put on seller-financing seminars at real estate offices.
I sometimes take part of my fee when I am hired and part at closing. Clients like that.
Creative financing, seller-financing, wrap-around mortgages, lease-option deals – they work for residential property, second homes, rental houses, commercial property, building lots – you name it.
When a buyer and a seller find each other and want to buy and sell using creative financing, buyer or seller or broker should bring in a real estate lawyer to write up the deal and see that it gets closed properly and safely and to make sure that everyone gets full disclosure. These creative financing deals are complicated and it takes technical expertise to write them up. I have lost count of how many deals I have written or reviewed since I started doing real estate deals in 1978.
The selling broker and buyer broker normally write up deals for no extra charge. Brokers are authorized to write purchase agreement if standard forms will cover all the issues. But with seller-financing, there are no standard forms. Each deal is different. A lot of issues have to be addressed. Brokers have earned their commission when they bring buyer and seller to the point where they have reached a basic oral agreement. It is not the Broker’s duty to write up a complex deal. It is my job to add the technical details, identify all the issues and address them, and get the deed, note, deed of trust, lease-option agreement, collection account agreement, and other documents drafted. All the escrow closer has to do then is sign up the parties and handle the money.
There are several ways I can be involved. The buyer or seller can hire me and pay me a fee to draft creative financing documents. Or I can work as co-listing or co-selling broker. I can do that because I am also a licensed real estate broker. This may not necessarily cost the broker anything. The seller might agree to raise the commission enough to cover my fee, and I can take all or part of my fee at closing, which makes things more convenient for everyone. No one likes to pay attorneys by the hour, nor do I enjoy keeping track of my time by the hour and sending out bills.
Whether I work as listing or selling broker or as listing co-broker or selling co-broker, I am representing my client both as attorney and real estate broker. The party which hires me is getting a real estate co-broker and a real estate lawyer for one fee.
My role is to craft a transaction that will close and which will keep everyone out of legal hot water. My role is to prepare all documents for the escrow agent and see to it that the transaction gets closed. When there is another attorney involved, it is my role to work with that attorney to find a workable strategy and explain to him or her why I believe a creative financing transaction would be reasonable and safe. I make sure that the other party gets legal counsel if necessary.
I am only licensed to practice in Washington. If your property is in another state, and if you still want to hire me, you would also need to hire co-counsel in your state who will “sponsor” me.
Click here to sign up for my email list.
James Robert Deal, Broker and Attorney
Broker with Agency One Realty LLC
WSBA # 8103, DOL # 39666
425-774-6611, 888-999-2022
James at James Deal dot com
Contents
- 1 JR-Deal-NewZ-1-18-2021
- 2 JR Deal NewZ 9-14-2020
- 3 Smart Meter Scam
- 4 Buy Real Estate In Partnership
- 5 JR-Deal-NewZ-7-19-2020
- 6 Flat Fee Payable At Closing
- 7 Dodd-Frank And Seller Financing
- 8 Small Cell Towers Outside Your Window – Harmful – Reduce Property Values
- 9 Voltage Can Vary
- 10 Where Does Petroleum Come From?
- 11 Can a dismissed Chapter 13 be removed from your credit report?
- 12 Become An Attorney Broker
- 13 Final Walk Through on New Construction
- 14 How Much Does Social Security Pay?
- 15 Why you can sell homes in the winter
- 16 4017 Colby Everett
- 17 Are Rich People Mean? – How Much Is Enough?
- 18 Helping Other Brokers
- 19 Vaccines Wear Off – Cannot Provide Permanent Protection – Cannot Produce Herd Immunity
- 20 LED Street Lights Reduce Property Values – Harm Eyes – wear blue blockers
- 21 Cell Towers, Smart Meters, 5G – They All Depress Property Values
- 22 Nina Beety’s 50 page Smart meter hazards report
- 23 Anti-vaxxer want informed consent and liberty
- 24 New York Times – Another Industry Captured Corporation – 5G Must Be Good Because Evil RT Warns It Is Unsafe
- 25 Tetanus Vaccine – TDaP – No Proof Of Safety
- 26 I just don*t thing being an adult is gona work for me
- 27 Sign In
- 28 Co-Broker Buyer Broker Agreement
- 29 JR-Deal-NewZ-2-8-2019
- 30 Home Renovation Can Cost A Lot
- 31 Funny Mockery of Ineffective Government – From An Opponent of Single Payer
- 32 IRS Provides Clear Test on How 20% Deduction Applies to Rental Income, Exchanges
- 33 Real Estate Calculations Every Investor Should Memorize
- 34 An additional inspection can cut short the time for the original inspection
- 35 Ten Mistakes Investors Should Avoid
- 36 How to Make Earnest Money Non-Refundable
- 37 4 Different Types of LLCs and the Ways They Pay Taxes
- 38 Why I Walked Away from a 118-Door Apartment, 10 Essential Real Estate Team Members & What to Do When Your Tenant Gives Notice
- 39 Home Inspection Questions
- 40 Door Knocking to Find Real Estate Sellers
- 41 Radio – 9-16-2018 8 PM Eliminating Traffic Congestion 9 PM Buying Real Estate in Partnership – James Robert Deal – Attorney Broker
- 42 How To Choose A Domain Name – by Saul Klein
- 43 Mistakes Sellers Make
- 44 Small 5G Cell Towers in Neighborhoods Reduce Property Values
- 45 15605 Cascadian Way Bothell WA
- 46 Cell Towers Reduce Property Values
- 47 Reciprocal Easements by Prescription
- 48 There may be a short statute of limitations on your credit card debt
- 49 The Downside of Smart Homes
- 50 Cancelling, Restructuring, Extending, Deferring, Rehabilitating, Consolidating Student Loans
JR-Deal-NewZ-1-18-2021
The James Robert Deal NewZ January 18, 2021 www.JamesRobertDeal.org/JR-Deal-NewZ-1-18-2021 SMART METERS TESTIMONY TO SNOHOMISH PUD...
JR Deal NewZ 9-14-2020
James Robert Deal, real estate attorney and real estate broker. Flat fee payable at closing. Helping buyers, sellers, and brokers. 425-774-6611.
Smart Meter Scam
Smart Meter Scam Click on this link: https://tinyurl.com/Smart-Meter-Docs
Buy Real Estate In Partnership
If you do not have enough income to qualify to buy a home, join together with several others. But a larger home, big enough for several families. With multiple incomes you can qualify. If you want privacy you can jointly buy a tri-plex or a four-plex. These can be bought with an FHA loan with only 3.5% down.
JR-Deal-NewZ-7-19-2020
The James Robert Deal NewZ. July 19, 2020.
Flat Fee Payable At Closing
I am a real estate transactional attorney. There is no charge for inquiries by phone or email. I can often quote a flat fee payable at closing.
Dodd-Frank And Seller Financing
The Dodd Frank Act restricted seller financing. It made due-on-sale clauses enforceable. However, lenders generally do not require payoff as long as the buyer pays the payments.
Small Cell Towers Outside Your Window – Harmful – Reduce Property Values
Small Cell Towers Outside Your Window - Harmful - Reduce Property Values...
Voltage Can Vary
Electricity can't be stored, so when I turn on a light, the power station must immediately produce some extra electricity. How is this possible?...
Where Does Petroleum Come From?
Is anybody contending that oil is being replenished within the earth? Keith Hisey, Geologist, Researcher, Senior Manager, Historian at Consulting...
Can a dismissed Chapter 13 be removed from your credit report?
Q: I am having trouble renting an apartment because of a dismissed Chapter 13 Bankruptcy. Can it be removed from credit reports since I did not...
Become An Attorney Broker
James Robert Deal is both an attorney and a broker. Attorneys can become real estate agents and make more money and deliver better service as attorney brokers. Join The Deal Team with Keller Williams.
Final Walk Through on New Construction
The final walk through is important when buying a new home. Make a punchlist. Listed items can be changed after closing. Expect a final inspection one year after closing.
How Much Does Social Security Pay?
Why does Social Security pay so little in retirement? Jeanine Joy, Ph.D., CEO, Trainer, Speaker, Author, Researcher at Happiness 1st Institute...
Why you can sell homes in the winter
For Sellers, Move-Up Buyers, Selling Myths The #1 Reason to List Your House in the Winter · 2.1Kshares · 1.9K · 82 · 33...
4017 Colby Everett
JAMES ROBERT DEALREAL ESTATE ATTORNEY REAL ESTATE MANAGING BROKERCOMMERCIAL MORTGAGE BROKERKW EVERETT 425-774-6611James@JamesDeal.com I am...
Are Rich People Mean? – How Much Is Enough?
Why Are Rich People So Mean? Call it 'Rich Asshole Syndrome'—the tendency to distance yourself from people with whom you have a large wealth...
Helping Other Brokers
I am a real estate broker and a real estate attorney. I help buyers, sellers, and other brokers throughout Washington. Call me at 425-774-6611 when your purchase or sale involves legal issues. I can often quote a flat fee payable at closing.
Vaccines Wear Off – Cannot Provide Permanent Protection – Cannot Produce Herd Immunity
Is MMR Vaccine a Fraud or Does It Just Wear Off Quickly? by Joseph Mercola, DO | Guest Writer Published May 8, 2018 | Vaccination, Risk &...
LED Street Lights Reduce Property Values – Harm Eyes – wear blue blockers
LED Street Lights Reduce Property Values - Harm Eyes wear blue blockers AMA adopts guidance to reduce harm from high intensity street lights ......
Cell Towers, Smart Meters, 5G – They All Depress Property Values
www.JamesRobertDeal.org/smart-meters Cell Towers, Smart Meters, 5G - They All Depress Property Values Cell Towers, Antennas Problematic for Buyers...
Nina Beety’s 50 page Smart meter hazards report
From James: Smart meters reduce the value of your property. They cause fires. Some damage caused by electrical surges are not covered by insurance....
Anti-vaxxer want informed consent and liberty
Anti-vaxxer want informed consent and liberty Ada Drinkwater, Wife mother grandmother great grandmother Liberty & informed consent are not only...
New York Times – Another Industry Captured Corporation – 5G Must Be Good Because Evil RT Warns It Is Unsafe
From James Robert Deal: Too much microwave radiation will make our cities and towns hard to live and work in. We will be fried by smart meters and...
Tetanus Vaccine – TDaP – No Proof Of Safety
The US Institute of Medicine concluded that the evidence is inadequate to accept or reject a causal relationship between the DTap vaccine and...
I just don*t thing being an adult is gona work for me
Please just overlook the atrocious grammar in three of these. They are not editable but they ARE too good to delete. Contentment is not the...
Sign In
CLICK HERE TOSIGN UP FOR A BETTER PROPERTY SEARCH TOOLYou will be asked for your email address and your telephone number.You do not have...
Co-Broker Buyer Broker Agreement
James Robert Deal co-brokers with other brokers on complex deals. This is a buyer broker co-broker agreement.
JR-Deal-NewZ-2-8-2019
Eliminate traffic congestion. James Robert Deal managing broker. Become a real estate agent.
Home Renovation Can Cost A Lot
Reality check: Don’t fall for these TV home renovation fibs Kitchen and bathroom remodels can cost more and take longer than HGTV shows lead you to...
Funny Mockery of Ineffective Government – From An Opponent of Single Payer
From James: Some points are valid. Some are not. But this is well written and sometimes funny. One of government’s problems is that elected...
IRS Provides Clear Test on How 20% Deduction Applies to Rental Income, Exchanges
Real Estate Calculations Every Investor Should Memorize
The Top 8 Real Estate Calculations Every Investor Should Memorize by Andrew Syrios | BiggerPockets.com...
An additional inspection can cut short the time for the original inspection
An additional inspection can cut short the time for the original inspection QUESTION: I’ve always been under the impression that when a buyer sends...
Ten Mistakes Investors Should Avoid
10 Lethal Mistakes to Avoid on Your First Real Estate Investment by Chad Carson | BiggerPockets.com...
How to Make Earnest Money Non-Refundable
Click here if you are having trouble viewing this message. Weekly Membership Newsletter JANUARY 8, 2019 • Stay Connected! QUESTION: I have been...
4 Different Types of LLCs and the Ways They Pay Taxes
4 Different Types of LLCs and the Ways They Pay Taxes by Scott Smith | BiggerPockets.com...
Why I Walked Away from a 118-Door Apartment, 10 Essential Real Estate Team Members & What to Do When Your Tenant Gives Notice
Support Our Sponsors: For Accredited Investors Only. Syndicator of multifamily investments, Ashcroft Capital. Co-founder, Joe Fairless,...
Home Inspection Questions
What Buyers Should Ask After a Home Inspection October 9, 2018 After an inspector has finished a home report, buyers may feel overwhelmed by any...
Door Knocking to Find Real Estate Sellers
29 Door Knocking Resources for Successful Lead Generation Posted by REDX January is the perfect time to door knock. Most people wait until the...
Radio – 9-16-2018 8 PM Eliminating Traffic Congestion 9 PM Buying Real Estate in Partnership – James Robert Deal – Attorney Broker
JR-DEAL-NEWZ-9-16-2018 WASHINGTON POLITICS JAMES ROBERT DEAL, BROKER, ATTORNEY, ENVIRONMENTALIST, AMATEUR MUSICIAN Radio Program – Sunday, September...
How To Choose A Domain Name – by Saul Klein
Choosing Your Domain in the Age of Dot ANYTHING Written by Saul Klein Posted On Friday, 14 September 2018 13:00 ·...
Mistakes Sellers Make
5 Mistakes Home Sellers Make Written by David Reed Posted On Friday, 14 September 2018 21:56...
Small 5G Cell Towers in Neighborhoods Reduce Property Values
CITY COUNCIL DENIES APPEALS OF CELL TOWER INSTALLATION Sam Catanzaro , Santa Monica Mirror, August 31, 2018 Wireless carrier Sprint wants to install...
15605 Cascadian Way Bothell WA
15605 Cascadian Way Bothell Washington. $430,000. 3 bedrooms, 2 bathrooms. Buy on FHA Rehab Loan. Hold long term. Eventually sewers may be extended 400 feet, and then two homes, two duplexes or five townhouses can be built. James Robert Deal, Attorney and Broker, 425-774-6611.
Cell Towers Reduce Property Values
Survey by the National Institute for Science, Law & Public Policy Indicates Cell Towers and Antennas Negatively Impact Interest in Real Estate...
Reciprocal Easements by Prescription
Reciprocal Usage Easements? What is the Purpose? Many buildings that were constructed prior to the 1960s lacked adequate parking, and/or even...
There may be a short statute of limitations on your credit card debt
Shortening the Limitations Period on Credit Card Collection Lawsuits Jon Sheldon August 6, 2018 Print/Download Email link to this article CONTENTS ·...
The Downside of Smart Homes
The Downsides Of Selling A “Smart Tech” House Posted on August 4, 2018Natural Living · · · · · · ·...
Cancelling, Restructuring, Extending, Deferring, Rehabilitating, Consolidating Student Loans
Student Loan Repayment Rights: Consumer Debt Advice from NCLC Joanna Darcus August 2, 2018 Print/Download Email link to this article CONTENTS...