Owner Financing Contract
This Owner Financing Agreement (the "Agreement") is made and entered into on this [Date] by and
between:
Seller (Owner): [Seller's Full Name]
Address: [Seller's Address]
Buyer (Purchaser): [Buyer's Full Name]
Address: [Buyer's Address]
The Seller and Buyer agree to the following terms regarding the sale and financing of the property
described below:
1. Property Description
The property being sold is located at [Property Address], with a legal description as follows:
[Insert Legal Description of Property].
2. Purchase Price and Payment Terms
- Purchase Price: The total purchase price of the property is $[Total Amount].
- Down Payment: The Buyer agrees to pay a down payment of $[Down Payment Amount] on [Date].
- Financed Amount: The Seller will finance the remaining $[Financed Amount] for the Buyer.
- Interest Rate: The annual interest rate on the financed amount will be [Interest Rate]%.
- Monthly Payments: The Buyer will make monthly payments of $[Payment Amount], including
principal and interest, starting on [First Payment Date] and continuing on the [Day of Month] of each
subsequent month.
- Term: The term of this Agreement is [Term Length] years, with the final payment due on [Final
Payment Date].
3. Late Payments and Penalties
- Payments not received within [Grace Period] days of the due date will incur a late fee of $[Late Fee
Amount] or [Percentage]% of the monthly payment amount, whichever is greater.
- The Buyer may cure any late payment without penalty if the payment is made within [Extended
Grace Period] days.
4. No Prepayment Penalty
The Buyer may prepay all or part of the outstanding principal balance at any time without incurring a
prepayment penalty.
5. Taxes and Insurance
- The Buyer will be responsible for paying all property taxes, assessments, and homeowner's
insurance premiums directly.
- The Buyer must provide proof of insurance naming the Seller as an additional insured party within
[Number] days of the Agreement date.
- If the Buyer fails to pay property taxes or insurance, the Seller reserves the right to pay on behalf
of the Buyer and add the amount to the Buyer's loan balance.
6. Title and Deed
- The Seller warrants that the property has a clear title, free of liens or encumbrances, except those
disclosed to the Buyer.
- The deed will be transferred to the Buyer upon full payment of the financed amount.
- In the event of default, title will revert to the Seller as outlined in Section 10.
7. Inspection and Condition
- The Buyer acknowledges that they have inspected the property and accepts it "as is" with no
warranties or guarantees from the Seller, except as explicitly stated in this Agreement.
8. Default and Remedies
- A default occurs if the Buyer fails to make payments for [Number] consecutive months, fails to
maintain property taxes or insurance, or violates any other term of this Agreement.
- Upon default, the Seller may:
- Provide written notice to the Buyer with a [Cure Period] day period to remedy the default.
- Initiate foreclosure proceedings if the default is not remedied within the Cure Period.
9. Buyer Protections
- Right to Refinance: The Buyer may refinance the loan at any time without penalty.
- Right to Cure: The Buyer may reinstate the Agreement within [Number] days of a default notice by
paying all overdue amounts, including reasonable fees.
- Subordination Clause: In the event the Seller takes out a new loan secured by the property, this
Agreement will be subordinated to that loan, ensuring the Buyer's position is unaffected.
10. Transfer of Rights
- The Buyer may assign or transfer their rights under this Agreement to another party with written
consent from the Seller.
- The Seller retains the right to sell, assign, or transfer this Agreement to another party, provided it
does not materially affect the Buyer's rights.
11. Dispute Resolution
- Any disputes arising from this Agreement will be resolved through mediation. If mediation fails, the
dispute will be submitted to binding arbitration in accordance with [State] law.
- The Buyer retains the right to continue possession of the property during any dispute resolution
process.
12. Governing Law
This Agreement is governed by the laws of the State of [State].
13. Entire Agreement
This Agreement constitutes the entire understanding between the parties and supersedes all prior
agreements. Modifications must be in writing and signed by both parties.
Signatures
Seller:
[Seller's Full Name]
Date: ________________________
Buyer:
[Buyer's Full Name]
Date: ________________________
