Home sellers may offer alternative financing mechanisms seller and property contracts to make a house more attractive for a wide variety of buyers, or selling a home can be difficult to finance with a conventional mortgage. Sellers may also prefer alternative funding mechanisms, and they would like to structure the revenue from the sale for several years. Existing mortgages where the seller owes money can complicate the contract for the writing process.

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The property contract is a method of financing the property where the buyer and seller sign a contract that says that after buyer pays a certain amount of money in monthly payments, the seller will sign the deed to the property. These agreements are risks to the buyer, if the buyer can not complete the deal as it is written, the seller can often keep the money in the concept of rent and sell the home to someone else.


Existing mortgage
If a seller has an existing mortgage on your home, and decide to sell your house with property contract generally must hire a third party custody to collect payments from the buyer and send them directly to the mortgage company. Such escrow company protects the interests of both buyer and seller, ensuring that funds are distributed properly.

Clause “due on sale”
Many mortgages have a clause ” due on sale “. This means the mortgage balance is due immediately, or accelerates, if the home is sold before the mortgage is paid in full. In this case, it may be difficult to sell the house with a property contract. The only way to complete a sale unless the buyer can apply for a new mortgage loan to pay the seller. There are technical aspects, however, because the seller still has the title, and agrees to transfer the property to receive the cash payment. Therefore, the house is not officially sold, and the certificate may continue to contract.

Other options
If the house has a mortgage, the buyer and seller may prefer a lease -purchase housing. This agreement will have a certain length of time, and if the buyer terminates the lease, you can purchase the home for a specified property in the contract amount. If the buyer does not rent or decide to move, most of these contracts are written so that the seller cancels the contract and stay with the money the buyer paid in concept of rent.