If a seller will carry all of the financing what fees can I expect to pay?
There are no “seller carry fees” but you will have the normal closing costs as in any other transaction except that you will avoid 1) any bank points or fees 2) an appraisal 3) a property condition report (standard in conduit debt) 4) an ALTA survey (you can get by with a boundary survey if you are comfortable with that). You will also typically have no recourse, no pre-payment penalty, and a low fixed interest rate.Seller financing is the best.
That’s great thanks!
Make sure you instruct your closing team to put the no recourse, no pre-payment penalty clauses in your note and mortgage/TD. Sometimes they forget!Seller financing is not just the best way, its the ONLY WAY!
I beg to differ on seller financing being the ‘only way’ or even the ‘best way’ to finance a MHP.Consider this: my bank on my first MHP was very happy with their loan to me. After 4 years they called me and asked me to borrow more money from them…(!) They wrote me a $0-down 100%-LTV line of credit to buy mobile homes to infill my first park (5.25%, 12 year amortization), AND wrote me a $0-down 100% LTV mortgage to buy my second MHP (4.75%, 20 year amortization).There is not a seller in the world that will ever call you after a few years and say 'hey, you’ve been paying me pretty well on that MHP I sold you, I’d like to lend you another $1 million dollars or however much you can borrow …'I’m not saying that my relationship with my bank is to be expected. I got lucky. But I suspect if you treat a local family-run bank well, they will treat you well, and you may end up with a ‘free’ MHP as I did, or at least one for a very low down payment and with good terms on a line of credit for homes to infill it. I’m borrowing at terms nearly as good as conduit on the land (parks are too small for conduit), at at rates better than Legacy Housing offers on mobile homes.Your mileage may vary,-jl-
Seller financing is with people. No ‘committees’. If and when issues arise, people can talk to one another. Some other benefits: No recourse, no pre-payment penalties. Able to structure the note ANY way that the buyer and seller agree. Skip payments. Apply the first few years payments to principal only. Zero interest. Able to discount the note at a later date. Able to move the mortgage to another property. No institution will do that.Banks have POLICIES. Banks have been known to call performing loans. That’s an exciting day!I can always refinance into a bank loan, but you can’t go the other way around.Obviously, I prefer seller financing. And my experience, like yours, has been unusual.One seller of property was happy with the fact that I paid on time and kept my word. He had other property that, when time came to sell, I was the ONLY choice. We’ve done over a dozen deals over the last 10 years. He’s been a seller and a lender. And now his children do business with me.As I say, my experience, like yours, has been unusual.Both good!
You should also be required to pay the sellers legal cost for having the mortgage drawn up.
I’m the world’s biggest fan of seller financing. All of my first five parks were seller carry. A good seller note, properly constructed, will always beat any other type of financing. Example: my first park deal was $400,000 with $10,000 down, non-recourse, 30 year ammo and 30 year note term. No prepayment penalty and 30 day cure period. Fixed low interest rate and no risk of the bank ever failing as there’s no bank. No appraisal or condition report required, no points, and no legal costs.I’m yet to see any financial institution match those terms.