Seller Financing in Washington State
A few years ago, I wrote an article regarding seller financing here. The real estate market in Western Washington has cooled down since then, but nonetheless, opportunities continue to abound for buyers seeking to purchase a home. Unfortunately, sometimes purchasing a home with conventional lending involves too many requirements that certain prospective purchasers cannot meet. Sometimes, seller financing provides a better option. Seller financing occurs where the seller of the property loans funds to the buyer to purchase the property.
First-time buyers, low-income buyers, and buyers with bad credit may have opportunities with seller financing that they cannot find elsewhere. Typically, though not always, the buyers have a previously existing relationship with the property seller – they may be family, friends, or long-term tenants. Seller financing can avoid the strict lending and credit requirements from financial institutions and offers flexibility for buyers and sellers.
Even with the flexibility, however, seller financing must be well-documented to avoid adverse legal and tax consequences. The parties may need to enter into a loan agreement, complete with a promissory note and deed of trust. There may also be other considerations involved, such as the fact that many seller-financed deals involve the purchase and sale of real estate outside the involvement of brokers. In such circumstances, a real estate lawyer can assist in drafting up the paperwork and guiding the parties through the closing process. In doing so, buyers and sellers could save on significant brokers’ fees.
Additionally, hiring a real estate lawyer can provide additional benefits not readily available in a standard purchase and sale transaction. For example, a real estate lawyer can provide legal interpretation and advice pertaining to easements, covenants, and other encumbrances found on title. A real estate lawyer can also help to advise the buyer or seller if, somehow, the transaction goes wrong. In such cases, the lawyer will already have the background in the case needed to get a jump start on trying to resolve the emerging dispute.
The attorneys at Beresford Booth have extensive experience with the purchase and sale of both residential and commercial real estate, as well as with helping buyers and sellers navigate through any disputes that may arise from those transactions. If you need assistance with, or have questions about, any real property issues, please feel free to contact Beresford Booth at info@beresfordlaw.com or by phone (425) 776-4100.