Self-financing home sale

My parents did this after retiring. Not sure of all the details, but the primary pitfall was they didn't put a clause in to preserve some of their expected profit in the event of an early payoff. The buyer signed and less than a year later paid in full, eliminating a lot of their expected profit that was built into the interest part of the deal.

They still did well for themselves on a house that had been paid off for a couple of decades, but they sold for a lower price than they could have gotten expecting to recoup over time.

Not sure what a seller could do when structuring the sale to guarantee a certain amount (I know some loans penalize early payoff, but don't think mortgages usually do). Based on their experience I would prefer to make the sale a clean break.

If just a small % it may not be a big deal.

We hold the deed. We would finance a portion only to allow the buyer to make the purchase and avoid all that goes with a bank mortgage. It's about 70k on 550k sale

edit: If you meant who will hold the deed, I was assuming the buyer will, but now that you ask the question, not sure-i can see where that might be an issue.

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Suggestions? Paperwork?

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Agree on basic terms, then go to a title company and hire them to draft the correct paperwork to make it happen and close the deal.

You are almost guaranteed to make a disaster of it if you try to do it yourself.

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Ptifalls?

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Be prepared to not collect all that is due and possibly have to hire a lawyer to sue/foreclose if you want to try to collect. Buyers who owner finance tend to do so for one reason; wise creditors won't loan them money because they are a poor risk.