The new update of the Multnomah Foreclosures web site (http://multnomahforeclosures.com/) includes NOD listings dating back to February of 2008. This data was added because we had it and there has been a lot of interest in this data by the visitors of the site.
Multnomah Foreclosures
http://multnomahforeclosures.com/
The new update of the Multnomah Foreclosures web site (http://multnomahforeclosures.com/) includes NOD listings dating back to February of 2008. This data was added because we had it and there has been a lot of interest in this data by the visitors of the site.
Multnomah Foreclosures
http://multnomahforeclosures.com/
What is most attractive about Land Sales Contracts or seller financing in general is the buyer and the seller can develop agreements that will fit each others needs. Recently a buyer and seller came to an agreement on the selling price of a home. The buyer had very little for a down payment. The seller proposed that the buyer make down payment installments during the term of the agreement. In this case the buyer and seller had to agree on a couple things. First they had to agree how much the down payment would be. Second they had to agree on how many installment payments the buyer could make. In this case, the contract for for 60 months and the seller and buyer agreed on a 48 month down payment installment plan.
The Deal:
Sales Price………$250,000
Down Payment…….10% ($25,000)
Buyer will pay 50% ($12,500) at closing and will pay the rest of down payment over 48 months at $260.42 per month.
Interest Rate…….7%
Payment………….$1496.93
Payments Amortised over 30 years
Buyer to pay Property Taxes ($1953 per year) and Insurance ($258) during term of contract.
Contract Term…….60 Months (Balloon payment of balance due month 61)
Monthly Payment Break Down
Contract……….$1468
Down Payment..$260.42
Taxes…………..$162.75
Insurance………$21.50
Total……………$1912.92
If the seller and buyer had agreed that the buyer was to make interest only payments instead of a 30 year amortization then the payment would be a little smaller.
20 years ago when I first entered real estate money was tight…especially for people that wanted to buy homes in Inner North and Northeast Portland. No reason to rehash why as what is more important right now is to visit how people adapted and moved forward.
Land Sales Contracts are agreements between the buyer and the seller that allow the transfer of equity interest in real property. This tool allows greater flexibility in the terms used to carry properties. Selling price, down payment or payments, payment schedules and other terms can fit the uniquness of the transaction.
You might be thinking why a seller would consider contract terms over cash out terms? There are several reasons why a seller would consider this avenue. Some are motivated by nessity and others have more calculted reasons. I hope to discuss those easons on this blog over the coming weeks. I will leave you with one interesting situation why someone would consider using a land sales contract to sell property.
One of the first clients I had when I entered real estate was a school teacher. He and his wife were planning on retiring and over the years they had aquired several rental properties and their family home. Their plan was to sell all of the properties on land sales contract at an interest rate of at least 10%. The payments they would recive from the contracts in addition to their other investments would mean they would have a comfortable retirement. With the exception of the home they lived in which was in Alemeda, all of their properties were located in close in Northeast Portland/Albina. The buyers put down downpayments that ranged in 10-15% and the interest rates ranged between 10% and 12% . Non of the buyers could have obtained a loan at the time. Either because they or the home they purchased would have conformed to lending standards of the time.
Looking back, I can see the benifits to the buyer, the seller and the community at large. Contract sales allow the market to move at a time when lending resources were limited. It allowed families and invidvidulas to invest in the community they lived in and take ownership of their lifestyle. Bottom line, it was a win, win, win situation for most.
The challanging times we live in is a good reminder that cash is not always king. That there is always another way to obtain our goals. For some selling or buying property on a land sales contract is the right opprotunity and for some the only one.