The emergence of desperate sellers means two things to buyers looking for seller financing: First, you’re going to find many more properties offering creative financing. Two, many sellers won’t be honest in their dealings.

When done correctly, seller financing can benefit both parties. However, buyers should reconsider deals with sellers that are already facing foreclosure and make sure that there is transparency in any deal.

Tom Resnick of the Daily Herald explains:

“I would…suggest proceeding with caution and installing safeguards for your protection. The fact that your owner is in a foreclosure situation indicates that he or she has severe financial problems. It is very dangerous to enter into [seller financing] agreements and then start depositing large checks with an owner in foreclosure. The owner could be in such terrible financial shape that he or she could take your checks and rather than keep the mortgage current, use the funds for other purposes.”

If you decide to go ahead with a seller in foreclosure, make sure to talk to a qualified real estate attorney about your seller financing deal and get everything in writing.

photo credit: the.urbanophile

See Also:

Seller Financing Guide

Seller Financing Step-by-Step

Tags | creative financing, foreclosure, Seller Financing