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How to Write Up a Seller Financing Contract That Protects Your Interests

by Christine Bartsch
Posted on
4-6 min read

Traditional mortgage lenders require home buyers to sign multiple rounds of endless paperwork to lay out the terms and consequences of a deal gone wrong.

But if you’re one of the less than 10% of sellers who’s agreed to personally give your buyer a mortgage in what’s called a seller-financed deal, you’re the lender now. And you should treat the process with the same level of vigilance using an airtight and enforceable seller financing contract.

Without the right terms and legal protections in place, you’ll have no recourse if the buyer falls behind on payments or defaults on the note. To avoid a worst-case scenario, follow these pointers on drafting a contract that guards your interests as the seller and financier.

We’ll cover:

  • The different types of seller financing contracts (and how to find the right one for your scenario).
  • Must-have contract financing terms such as loan payment amounts, interest, taxes, insurance, and additional fees.
  • How to set up a payment schedule in your favor.
  • Buyer responsibilities such as home maintenance and repairs.
  • Enforceable terms in the event of a loan default.
  • Who to consult to make sure the contract meets the requirements of your state laws.

Ready to think like a lawyer?




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