How does one go about selling a house that has owner financing?

Question

I have the deed, there is a deed of trust recorded, there is a 30 year mortgage (27 years remaining), low monthly payments & a low finance rate.

Do I have to get the mortgager's permission to sell, or can I sell it to pay off the mortgage (while hoping to make a profit)?

I'd rather not go through a real estate agent, but will potential buyers not be interested because of the deed of trust? Do I have to satisfy the deed of trust first before I can sell the house?

All input appreciated. Thank you!

Answer 1

Confusing isn't it? The title company you choose or the buyers choose, thru their lender will order the payoffs, as per the buyers request. All liens effecting title will have to be paid off at the closing. For instance, I do alot of For Sale By Owner Properties, for my cleints, because sellers are more willing to help my clients with some closing cost, versa paying a realitor fee. As a broker for over 150 companies, I have my title company order the payoffs, title on both the seller, and the buyer, order the surveys, anything that is needed to close the loan. It is a easy process, if you work with a knowledgeable person. Good luck to you.

Answer 2

You may sell the property yourself if there is not enough money to pay a real estate agent. You do not have to get permission of the mortgage company to sell the house.

When you open escrow or get a closing agent that person will get a demand asking the mortgage company how much it it owed.

You say there is a 30 year mortgage on the property with 27 years left so I assume that the mortgage was gotten 3 years ago on a refinance or purchase.

If this was a refinance then your profit will be determined based on what percentage of the property was refinanced. Let's say for the sake of this argument suppose the property is valued at $150,000. Three years ago the lender allowed an 80% loan on the property, so that means the lender refinanced the house for $120,000 therefore there is $30,000 worth of equity plus whatever appreciation has been added or profit in the property. We will say for the sake of this argument that the property appreciated at the rate of 5% per year or $7,500 X 3 =$22,500 appreciation plus $30,000 worth of equity for a total of $52,500. Guess who that go to after the close of escrow?

If it was a purchase and you placed 20% down the same scenario would apply. You can interchange 10% or what ever to figure what would be your profit or equity in the property.

Any potential buyer will have to qualify for a new loan to purchase the property and it does not matter if you use a real estate agent or not.

Under my scenario if a new buyer would come to the table with a 10% down payment of $17,500, they would have to get a new first mortgage of $155,000. This would payoff the mortgage you have and leave in the escrow for you approximately $52,500.
The purchase price would be $172,500.

Now that will not be all free and clear as you and the new buyer would be responsible for closing cost of which each will probably be responsible for their own, which in my calculation would be approximately $2,600 for each of you.

If you want to finance the house yourself, that is ok There is a first mortgage on the property, take the down payment, and the first mortgage and subtract it from the value of the property. What is left would be a 2nd mortgage the buyers would pay you. Now amortized the payment out (Normally 2nds are at 15 yrs call and amortized for 30 years. This would be the payment on the 2nd mortgage. Now add the payment of the first mortgage to the 2nd mortgage that you have figured out this would be how much the new buyer would pay you each month. You keep the 2nd mortgage portion and mail the first mortgage payment to the first mortgage holder.

Now once you have found a buyer, signed a purchase contract, get one from any stationary store or staples or Office Depot, get an appraiser to appraise the property, find an escrow or closing agent.

I hope this has been of some use to you, good luck.

"FIGHT ON"

Answer 3

It sounds that you are trying to be an Investor.If the property is in a Land Trust and Recorded this gives you full control of the property.If you found a buyer and have a Real Estate Attorney does not matter who's name is on the mortgage as long as the debt is paid at Closing,Taxes,Attorneys fees etc.After everything is paid the remaining amount is your profit.(this is what I do)Keep in mind you need to have expenses and or a 1030 exchange to offset your Capital Gains.Congrats.

Real Estate Investor

Answer 4

You can sell - no problem. Just need to make sure the mortgages are all paid off at closing. The title company or attorney or whoever handles the sale will take care of that, cuz you can't sell a property without paying off all the liens, etc.

Buyers won't care, as long as it's all paid off in the closing. If you're going to do it without a realtor, at least contact the title company that you'll need to handle the closing. Perhaps they can guide you about what documents they'll need.

Answer 5

You need to have the attorney you intend to use look over the contract.If the attorney is going to help with the closing he should review it for you and is better qualified to answer.Houses with mortgages are sold every day.If the lender is satisfied thats all they care about. A realestate agent can help in selling your home especially if you have never sold a home before.A good realtor can get you a better price in most cases and the commission is then earned and you save money on the marketing costs.

Answer 6

well take sell it take the signing amount pay the mortgage

Answer 7

you should definately use the expertise of an agent.

Answer 8

don't be cheap or stupid, get a realtor ASAP, and consult with an attorney ASAP!