Seller financing options are discussed as an alternative to traditional mortgages. Three main options are covered: lease options, contracts for deed, and installment land contracts. Legal and real estate professionals provide guidance on properly structuring and closing these types of transactions. Education is emphasized as key to ensuring the credibility and comfort of all parties involved.

1. Creative Financing Education
Still Puzzled about
Seller Finance Transactions?

2. Your PresentersYour Presenters
Jax PetteyJax Pettey
Real Estate Attorney 801-208-0025Real Estate Attorney 801-208-0025
President of 1President of 1stst
National Title Jax@1stNationalTitle.comNational Title Jax@1stNationalTitle.com
George AndersenGeorge Andersen
Mortgage Banker 801-550-1382Mortgage Banker 801-550-1382
Credit Education george@solaruslending.comCredit Education george@solaruslending.com
Rob AubreyRob Aubrey
Associate BrokerAssociate Broker 801-694-4762801-694-4762
Resident GeekResident Geek rob@aubrey.netrob@aubrey.net

3. Discussion TopicsDiscussion Topics
Seller Financing…Seller Financing…
Just a short term “Bridge Loan”?Just a short term “Bridge Loan”?
How does theHow does the BANKBANK look at it?look at it?
The Long Term SolutionThe Long Term Solution
How does theHow does the LAWLAW look at it?look at it?
The Legal and Board of Realtor SideThe Legal and Board of Realtor Side

4. Not Cover Today
Cover Today
Real Estate Principles, Contracts,Real Estate Principles, Contracts,
Mortgages, Credit, LawMortgages, Credit, Law

5. The Reality…The Reality…
1.1. 43 Million Americans (25.5%) with FICO43 Million Americans (25.5%) with FICO
scores of 599 or belowscores of 599 or below *www.247wallst.com 07/13/2010*www.247wallst.com 07/13/2010
2.2. Feeder population of “un-banked”Feeder population of “un-banked”
3.3. Over supply of housingOver supply of housing
4.4. Tighter credit standardsTighter credit standards
Just a blip???Just a blip???

6. Where is Contract for Deed?
What is the 4155?
Is this something new?
Will it stick around?
Magna Carta
What are overlays?

7. Where is the resistance?Where is the resistance?
The home owner The listing agent
Visual Acuity - Test #1

8. DDyynnaammiiccaallllyy structured seller financingstructured seller financing
Uniform Real Estate Contract (Contract for Deed)Uniform Real Estate Contract (Contract for Deed)
Can write over an FHA or a VA loanCan write over an FHA or a VA loan
Buyer may use combinations of cash and hard costs ofBuyer may use combinations of cash and hard costs of
improvements to satisfy down paymentimprovements to satisfy down payment
Seller retains titleSeller retains title HUD Circular Letter 7 - 90HUD Circular Letter 7 - 90
Buyer holds enforceable “Equitable Interest”Buyer holds enforceable “Equitable Interest”
www.realestate.utah.gov

9.  Direct substitutes for a CA$H down payment
1. Roofing
2. Windows
3. Insulation/weather stripping
4. HVAC systems
5. Solar and wind systems
Fun things you can do with FHA loans
• Negotiated with other sales concessions
1. Carpet and decorating allowance
2. Plumbing and electrical fixtures
• 3 ways to borrow money for down payment

10. The Role of the Lender
1. Identify the Road Block
2. Prescribe the Remedy
3. Set time frames
4. Get commitments
5. Structure the final close
On the hook, and get paid LAST!

11. Fico, the big 3, and big business
bankruptcydischargesettlement.com (2008)
In June of 2004, the Public Interest Research
Group revealed that (79% or more) have
significant errors in their credit profiles. These
errors affected credit scores by 50+ points.
10th
Circuit Appeals Court ruled that E-Oscar is
not a reasonable validation method (2010)

12. Government bail out for
credit scores?
Credit
Education!!!
You cannot play the seller finance game
without this relationship…

13. Approved in all 50 states
Personalized credit coaching
Education and self-help library
12-month credit restoration service
24/7 web access
Money back guarantee
Refer 5 and the service is FREE
www.united-www.united-
credit.orgcredit.org

14. Banks, we don’t need no stinking Banks
Possible Titles for the
SELLER FINANCE
SYSTEM

15. How To write the OfferHow To write the Offer
REPCREPC
 May need to cross out certain sections.May need to cross out certain sections.
Seller Finance AddendumSeller Finance Addendum
Select Appropriate TermsSelect Appropriate Terms
For Contract for DeedFor Contract for Deed
Select OtherSelect Other
Write “Contract for Deed/UREC”Write “Contract for Deed/UREC”

16. More items to chew on…More items to chew on…
#1#1 Sales are entered on the MLSSales are entered on the MLS
#2 Transaction is eligible for a 1031 Exchange
Paradigm Shift – it’s the decade of the Realtor

17. Benefits to the Transaction?Benefits to the Transaction?
HUD1 settlement statementHUD1 settlement statement
Owner’s policy of title insuranceOwner’s policy of title insurance
Closed with 3Closed with 3rdrd
party legal adviceparty legal advice
Payments made to, and “trigger” documentsPayments made to, and “trigger” documents
flow through, a 3flow through, a 3rdrd
party escrow companyparty escrow company
…Looks, feels, and acts like an institutional closing

18. Make a bigger net
Haul in ALL the
fish
Sift and Sort
Policy
Revised Sales Strategy

19. What is the Objective?What is the Objective?
1.1. Share the information and educateShare the information and educate
2.2. Set up regularly scheduled classes for:Set up regularly scheduled classes for:
a. Our peers and co-workers who
will attend this class
b. Our Sphere of Influence who will
attend a Consumer Oriented class
Seller Finance Education
Website, coming to a computer near you!

20. From Theory to Practice
=

21. Just do it!
You retain on
average only 7% of
what you hear.
To learn, you
must DO.

22. Catch a tsunami and you’re
sitting on top of the world.
DYNAMIC
FINANCE
EDUCATION

23. First thing: write it down
Legal advice must be given in each of these
transactions.
You should not give it:

24. Or you can Have An Attorney do it
Your Broker
Your Team
Leader
Your Owners

25. Seller Finance Options
1. Lease Option
2. Contract for Deed
3. A.I.T.D.
Strong For Mo. Legal You
Seller 2 $500
Both 2-7
$1,500Buyer 7
$500
to
$1500

26. In order to have a successful
transaction, you must:
Customize Contracts to Meet the Specific
Needs of each party to the contract
Correctly Educate all parties to ensure
Creditability and Comfort
Indemnify, Indemnify, Indemnify
Close the Transaction

27. THE DYNAMIC FINANCE SYSTEM
Buyers
Document set Strong for? Mo. Legal $ Realtor
1. Lease Option Seller 2 $500
2. Contract for Deed Both 2-7 $500-$1,500
3. A.I.T.D. Buyer 7 $1,500
©

28. Buyer
Pool
How do you get people into
your

29. Other
Agents
Buyers
Pool
Lending
Partner Ghost
Signs
KSL and
craigslist
Past
ClientsRadio
Webinars
Business
Owners
Seminars
7
referrals

30. CROA and the Financial Reform ActCROA and the Financial Reform Act
As a federally-chartered
credit union
As a credit union services
organization
As an operating subsidiary
of a federally-chartered
credit union
United-Credit.org
Sift and sort your prospects while the law
sifts and sorts your strategic partners
Monetary acuity - test #2

31. THE DYNAMIC FINANCE SYSTEM
Buyers
Credit
Listings Final Close
Lending PartnerNew Buyer
Document set Strong for? Mo. Legal $ Realtor
1. Lease Option Seller 2 $500
2. Contract for Deed Both 2-7 $500-$1,500
3. A.I.T.D. Buyer 7 $1,500
©

32. Three Types of People
1. Those that don’t get it and do it,
They will be SUCCESFULL
2. Those that get it and do it
They will be VERY SUCCESFULL
3. Those that don’t do it
Learn the script, “Would you like fries with that?”
Next Class in….???