How It Works - Buying on Seller Financing

Why Use Bank Financing When You Can Use Seller Financing!

                      
           Who is Seller Financing For?

• And people who can get a bank mortgage

• And people who have a significant down payment

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   Key Elements of Seller Financing:

• Seller acts as the bank for you, the buyer, so you don’t have to get a bank mortgage!
• Title and mortgage stay in the Seller’s name
• You register a caveat on title, to show your interest in the property
• You and the Seller agree on Down Payment, Purchase Price, and any other Terms
• You make Mortgage payments to the seller each month, either until the Mortgage is paid off, or until your agreement comes to an end with the Seller. At this point you have to get your own financing and pay out the seller the remaining loan balance.
• You buy the home using an “Agreement For Sale” document, which is similar to a Mortgage document, except it’s between the Seller and Buyer, rather than Buyer and Bank.
• CAUTION---You NEED a Lawyer! This is a complex document, and is not easy to fill out like a Purchase Contract!  But don’t worry we have a lawyer on our team that specializes in these creative home purchases.

You may be wondering why in the world someone would want to leave the Mortgage and Title in their name, yet sell the house to someone else…Read the Seller’s Perspective on Seller Financing to see why!

Here’s an Example

You find a home that’s for sale that you absolutely love, and you’ve decided it’s a good time for you to move, but you cannot qualify for a mortgage to buy it…or you simply don’t want to! The seller has told you they would be open to having you buy the home on Seller Financing.

Seller Financing can be used for the entire amount of the mortgage until the mortgage term ends, as in this example. It can also be adapted for a smaller mortgage amount (you put more down), a larger mortgage amount (existing mortgage plus the owner has equity built up they are willing to receive payments for), and for different lengths of time.

As you can see, this is a very creative tool, with many possibilities to accomplish the goal of financing without banks! Learn more about how we can help you buy your dream home using our Seller Financing Buying Program!

The ‘Agreement For Sale’ is simply a document saying you, as the buyer, have bought the property and are paying the owner in instalments based on your agreement, rather than the conventional cash purchase using a bank mortgage. Think of the ‘Agreement For Sale’ as a mortgage document between the Buyer and Seller.  Title remains in the sellers name until the seller is paid the loan amount in full, and a caveat is registered on title to protect your interest in the property.

Disclaimer

This website is purely for information purposes only, and is intended to assist people in understanding how the strategies we use work. Furthermore, it does not purport to provide legal advice and is not intended to form a contract or any part thereof. No part of this website is intended to modify or take the place of any clause within any agreement that you may or may not be a party to, and no liability or reliance herein should therefore be made. You are strongly advised to obtain and rely upon your own independent legal advice should you wish to proceed and enter into an agreement with us, or any other party.