I recently wrote a contract on a trailer in Florida. The buyers are putting down 2/3 of the sale price and their mortgage broker has said he will be able to get financing through a private invester at a high interest and the have excellent credit and work history. The trailer and land appraise at the sale price and the mortgage broker said his investors have pulled out for unrelating reasons the day before closing. This whole situation is bad because the owner already moved out and is in her new home which she is buying from a family member. She has informed me she would be willing to hold the mortgage for the existing 1/3 of the price and I don't know how to go about this now. I have both sides the seller and the buyer. Should I have the seller draw up the owner financing contract or should I have a title company do it, I don't know. Thanks for your help in advance.

If you were here, and you're not . . . . I would assemble the specifics that the Seller and Buyer are agreeable to:

Mortgage Amount;
Amortization Schedule;
Interest Rate;
Monthly Payment; (estimated)
Grace Period; (if any)
Taxes; (who pays)
Insurance; (who pays, who benefits)
Balloon Payment; (if any)
Restrictive Covenants; (if any)
Due on Sale Clause . . . . stuff like that.

And then go to the Buyers' Attorney to draft a Mortgage Deed and Note to be approved by the Seller and Sellers' Attorney and then signed by the Parties. Maybe a Title Company can do this . . . . but creating something from scratch is usually NOT their forte'. Having all the detail parameters agreed to in advance will minimize the amount of time anyone (Attorney or otherwise) will spend drafting the final document.

I usually build in an authorization for the Seller to access Credit Bureau to evaluate the Credit of the Buyer . . . . but you seem to be well beyond that point; Seeing as the Horses have already left the Barn.

I won't even ask how old the Mobile Home is . . . . or how much money is involved here.

I hope that procedure, or something similar will work in Florida. Good Luck.

(MEMO to Self: Don't use that Mortgage Broker again !)

Thanks Vermont,
That is great info. The mortgage company has ran the necessary information regarding the credit report and income verification so the seller is confident of the buyers ability to pay plus the loan has minimal risk being the appraisel came in at selling price. The buyers would lose all their money if they didn't pay, it would'nt be smart.

Sorry; but I wouldn't trust anything that this one told you.

Good Point!

I had a seller do seller financing once..... once. Take that as a (not so subtle) hint.

on edit: the LOSER mortgage broker that drummed up the ridiculous idea and convinced the sellers the buyers were good for it is out of business now. The buyers never made one payment to the seller. They were out about thirty grand.

Trailers usually have a lot of seller finance more so than traditional stick built homes.

In many cases sellers are stuck with holding a note.The fact that the note will be a senior one will make it easier.Hardly any note companies are buying second positions.

Being that it is a first the seller can sell to a note holding company usually for 50 cents on the dollar after closing and be done with it.

When doing a seller financed note you don't structure it with the buyer in mind.You structure it for the note buyer so that you can plan to get rid of it if you want to and cash it.A classic mistake for sellers is not to think of the note exit strategy just what the buyer needs to close the deal.

Then what the seller is left with is an unattractive note they can't sell because of interest rate,terms of the note,balloon times,etc.

Seasoned notes that have a history of payments are preferred for buying over new notes but if terms are attractive a note holder will buy the new unseasoned debt in first position.

Good luck

Excellent advice SuperRealtor! I know this post is a bit old but I have to add in for anyone who may read in the future.

In addition to being a Realtor I buy notes throughout the United States, on houses (including mobile homes), land, commerical, etc. I agree with you that very few people buy 2nd position notes. My company does not buy anything that's not 1st position in order to minimize risk.

I'm not a lawyer and I would recommend anyone carrying back a note consult one for structuring advice. But I can tell you what my company (and many other note investors) deem to be the best structured note, just FYI!

Residential note:
- 10% down payment or greater
-9% interest or higher
-30 year amortized
-balloon in 7 years
-buyer has 650 credit score or greater

THAT is a top dollar note that you could definitely sell for more than 50 cents on the dollar. :)
Again, just FYI :)

50 cents? Seriously?