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Thinking of buying a house; and confused as heck
Tweet Topic Started: Feb 19 2006, 11:43 PM (97 Views)
Aladdar Feb 19 2006, 11:43 PM Post #1
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I found a very nice townhouse at an affordable price in our area which is rare. I like the house, I like the price, I just don't like the financing. The seller is requiring that we use seller financing with 10% down and 7% for 30 years. Those terms don't seem so bad although I could definitely get a better interest rate although I'd then have to pay a buttload of closing costs. My main concern is with the seller financing.

Is anyone familiar with this type financing? I believe that he would go ahead and sign the title over to us so that we're free to sell the home or refinance at any point should we choose to. I just want to make sure he can't decide to repo the house should we be late on a payment, or find out at a later date that he's got another mortgage on the home or something.

Does anybody know what to look for, etc...
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DaveReaves Feb 20 2006, 10:55 AM Post #2
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Dispite the cost, one thing you can do that will make you glad is to hire yourself (or have the seller higher) a title insurance company to work with you through the process. They will make sure the process goes through as smooth as possible and in the event that there is a problem with the title they can make sure that gets corrected before you end up with a property that has been obtained via fraud, was not convayed properly, has leins or forcloseures pending or any other things that you really don't want to find out about after the property is in your name and you have payed some guy tens (or hundreds) of thousands of dollars.
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Didge Feb 20 2006, 11:22 AM Post #3
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I agree with DR on this one.

When I closed on my house I used a Title company for that exact reason. I wanted to make sure that everything didn't get fubar'd. Also, I didn't (still don't) know a great deal about closing even though I helped my parents with the process a little over a year or so ago.

A Title company is worth it, because if anything goes wrong, they're the ones that are left holding the bag of worms, not you. Just make sure you schedule an appointment and don't sign anything until you're ready to sign.

I know with my house I had a stipulation put into the signing, based on square footage and the price assessment, and the fact that I was going to be out of town the weekend I was to buy my house. The seller was selling a 4-bedroom house, even though to code required for the rooms it could only be a 3-bedroom house. I thought it was a cheesy way to bump up the price of the house, and made sure to get a statement from the Home Inspector certifying that the price was based on square footage rather than room numbers.

Anyway, go through a Title company. It'll make you sleep a bit better, and their prices aren't that bad, when you consider what the price of sleeping a little better will cost you.
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Aladdar Feb 20 2006, 12:19 PM Post #4
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If we go through with the deal I'm probably going to demand that the seller pay all the fees for the title company, for the home inspection, and for the lawyer to right up the contractual agreement. It will not be done without a thorough title search and property inspection.
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DaveReaves Feb 20 2006, 02:34 PM Post #5
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For the most part those are seller costs. Its pretty rare to see the buyer paying for title insurance.
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Aladdar Feb 20 2006, 07:00 PM Post #6
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you're right. The only thing I think they want us to pay for is the property inspection and the dock stamp on deed or whatever it's called. I think I'm going to push to have him pay for those as well.

Either that or ask him to reduce the interest to 6.5%.

It turns out that his reason for wanting this form of financing is due to his investor status. His father is a builder and he buys houses cheap from his father and then sells them with seller financing so that he can get the income stream of a landlord without having the hassle of being a landlord. It makes sense I guess.
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