While New York City is the financial capital of the globe, owner financing can be used to purchase real estate anywhere in the state. We actually see more notes from other parts of New York than just the New York City region.
The history of owner financing dates back to centuries. It is simply a way for people selling and people buying property to enter into a transaction without the need to involve a bank. The documents are prepared by an attorney or title company after each side has agreed on the sales price, down payment and terms. The seller of the property is the owner of the mortgage note. They collect the monthly payments. Later, the note holder has the option to either continue to receive payments or sell it to a New York buyer.
Seller Financing
If you are selling the property, consider:
Sell to someone who has a high credit score, preferably over 650.
For a house the buyer plans to live in, insist on a minimum 10% down payment and 20% for other types of property. This isn’t always possible so make sure to save as much money as possible to protect your “protective equity”.
To ensure that all documents are legal and correct, a lawyer or title company should prepare them. This act protects you in the event that you decide not to keep the note. It also makes the note more desirable if it is sold.
Be aware that you are taking on risks if you keep the note. These risks include:
Buyer of property may default or make late payments.
The buyer may allow the property taxes or fire insurance to lapse, and you would need to be involved.
Your collateral may be less valuable if the occupants do not keep the property in good repair or cause damage.
The Note Sales Process
Alternativly, if the note is sold, the New York buyer of mortgage notes takes on these risks. You may want to learn more about the process of selling your note.
Seascape Capital is a New York mortgage broker that you trust and feel good about. You should ensure that they are at least five-years old, licensed in at most one state, and have an excellent rating with the Better Business Bureau.
After you have reached an agreement with the buyer, they will send you a written agreement. They will also ask for copies of any real estate documents.
They will review your documents and then order a drive-by appraisal. This usually takes between 7-10 days.
The mortgage buyer will then contact a title company in order to determine if there are any title issues. This takes about 1-2 weeks.
They will then send you documents to assign the note. These will be signed and returned with your original mortgage and note.
After the investor receives your documents, you should expect to receive your money within 1-4 business days.
Seascape Capital was established in 2002 and has participated in the purchase of many New York Mortgage Notes. Seascape Capital is licensed and holds an A+ rating with the Better Business Bureau. We are available to help you with any questions or concerns you may have.