“By owner” simply means that a seller is listing and selling the property himself, without the representation of a Realtor.  Not recommended for all home-sellers, especially in this market (after-all, you can give yourself stitches, but do you really want to?).  ”For Sale by Owner” does not mean that a home-owner will owner finance for you.

“Owner Finance” means that a home seller has paid off his mortgage and owns the home free and clear, and is in a position to finance the home for you.  Many home-owners attempt to do this before the home is paid off, but beware, there is a clause in most mortgage notes stipulating against this, and if discovered, the home-owner’s note can be demanded “due in full” (presenting a very uncomfortable situation for you–you may have to move unexpectedly, and possibly lose all of the money you have invested into the home).  To protect yourself, with any “owner-finance” situation, I recommend the assistance of an attorney, or at least a Realtor whom you trust.  Your Realtor can investigate the situation to determine if the home is truly paid-off since most title companies will not allow what is called “a wrap” if there is still a note owed on the home.

Many resort to finding something in an owner-finance situation because they feel they can not get conventional financing.  There are many, many programs such as the “$100.00-Down Payment” for HUD homes with allows for the obvious low-down provided the credit-score is at least 640 for an FHA loan.  USDA Home Loans are also an option with “zero-down” opportunities in rural areas.  Investigate before you invest (whether in you own home that you occupy, or another) and consult with your trusted Realtor to protect your interests.

Need help finding your next home?  I would love the opportunity to earn your business and guide you through the process.  Feel free to contact me any time at AAREY@HaloAgent.com or call me directly at 214.901.1341.

* Amy S. Arey, Realtor * Halo Group Realty, LLC * 214.901.1341 *