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re: Bond for deed - bad idea?
Posted on 6/18/15 at 3:35 pm to cdl2006
Posted on 6/18/15 at 3:35 pm to cdl2006
Why does the buyer want to do it? 99 percent of the time, the buyer can't get traditional financing. Why is that? If he had a short sale a year and a half ago and can get traditional financing in the next 12 months, and he makes a large downpayment, has cash, etc... it might not be terrible.
If he has no money and no credit, run away.
I have seen bond for deeds work in some circumstances very well for all involved, and I have seen it blow up also.
If he has no money and no credit, run away.
I have seen bond for deeds work in some circumstances very well for all involved, and I have seen it blow up also.
2
Posted on 6/18/15 at 3:46 pm to LSUFanHouston
To be quite honest, if you have low information on the seller end and/or low income/low down payment/bad credicks on the other it has an elevated probability of ending in tears.
Protect yourself and read through the agreement very carefully, and make sure you vet the heck out of this potential buyer. Verifications of Employment, Assets, etc. are perfectly reasonable and called for.
Don't offer this to a deadbeat. Do your homework. Make them put a chunk down and make sure you have your exit strategy clearly defined and easily accessed if things go pear-shaped.
Protect yourself and read through the agreement very carefully, and make sure you vet the heck out of this potential buyer. Verifications of Employment, Assets, etc. are perfectly reasonable and called for.
Don't offer this to a deadbeat. Do your homework. Make them put a chunk down and make sure you have your exit strategy clearly defined and easily accessed if things go pear-shaped.
This post was edited on 6/18/15 at 3:47 pm
Posted on 6/19/15 at 12:37 pm to LSUFanHouston
quote:
Why does the buyer want to do it? 99 percent of the time, the buyer can't get traditional financing. Why is that? If he had a short sale a year and a half ago and can get traditional financing in the next 12 months, and he makes a large downpayment, has cash, etc... it might not be terrible.
If he has no money and no credit, run away.
I have done a few bond for deeds. The thing I find around here is there are people who make good money, like offshore or plant workers, but their credit is screwed because of a divorce. They usually have enough cash downpayment to make it worth it and understand they will have to pay some higher interest. I have a few still paying and have had a few refinance once they could and pay me off. I also had one I had to take back and that wasn't cheap.
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