I was just curious as to the reasons why it is better (or cheaper?) for the buyer to have the seller carry the contract? It seems like there is a lot of money saved as to having you (or the bank? who would carry it if the seller didn't?) carry the contract. What does the contract even represent? My landlord doesn't carry the contract, the lady who he bought it from does. Our rent is incredibly cheap when compared to other houses around campus. Any information/knowledge would be appreciated!
2006-08-28 07:04:35 · 2 answers · asked by CheeseyGriller 2 in Business & Finance ➔ Other - Business & Finance
When most seller's take back a note on the property they tend to finance below market rate because they do not have the same costs that a bank does.......bank's use "other people's money" to make loans and there is usally a "cost of funds" associated with this; which a seller will normally not have since the seller is not going out to the market to borrow money so he can provide the buyer with a loan..............
2006-08-28 07:15:08 · answer #1 · answered by boston857 5 · 0⤊ 0⤋
Some owners carry a mortgage to collect the interest. Sometimes they just get disgusted with Realtors, (as I have), or have too many applicants turned down for credit.
Some do not know the market, values, and sell too cheap.
I carried a mortgage on a building with a higher interest rate than the market rate. I knew the buyer and he was just over extended for creditors. I never lost. I did own the deed until paid.
2006-08-28 14:16:56 · answer #2 · answered by ed 7 · 0⤊ 0⤋