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We used an escrow service. The buyer paid the bank and the bank paid us. The bank took care of collecting the money and re-amortizing the loan every time the buyer made a larger payment than was due. They would also send past due notices but they were never past due. They also physically held the payoff document, which protected the buyer from them paying us off and not filing that with the court. The deal we worked out was that the buyer paid the escrow fees, which were a few hundred dollars per year.
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(02-05-2021, 07:06 PM)dobanion Wrote: I sold one lot in Kau on contract. But I knew the guy. Worked out great for the both of us. He got the lot, and he paid me every month, on time.
Probably way outside the norm.
I don't think it's at all outside the norm. I know several people who bought their property on agreement of sale, myself included. I don't know anyone who is dissatisfied with the outcome.
Banks generally require 50% down on vacant land and they have a rubber stamp foreclosure process. A low down A/S with the seller is far more appealing and less risk for some people even with the higher interest rate.
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I prefer a purchase money mortgage over an agreement of sale, but tomato tamoto.
You can get creative with these deals for sure. Our neighbor asked us if we wanted to buy his lot where he was farming guava. His asking price was fair but we couldn't come up with it. So the deal we worked out was that we would buy the land at a lower price and lease it back to him for free for a set amount of time so that he could get his equity out of it and continue to extract income from it. It was win-win and he didn't have to deal with realtor commissions or the other headaches.
