How to Write an Owner Carry Contract

If you are a property owner looking to sell your property without involving banks or financial institutions, an owner carry contract could be an excellent option for you. This type of contract is also known as seller financing, and it allows the buyer to pay for the property in installments over time. However, to create a legally binding owner carry contract that protects both parties, there are certain essential elements that you need to include. In this article, we will guide you through how to write an owner carry contract.

1. Start with a clear and concise description of the property

The first thing you need to do is provide a clear and concise description of the property you are selling. This includes the address, legal description, and any other identifying information that may be necessary. It is also essential to include any restrictions or easements that apply to the property.

2. Specify the terms of the agreement

The terms of the contract should include the purchase price, the down payment required, and the interest rate you will charge. It is also essential to specify the length of the payment schedule, the amount of each installment, and when payments are due. Additionally, you should be clear about any penalties or fees for late payments and early prepayments.

3. Clearly outline the rights and responsibilities of both parties

The owner carry contract must clearly outline the rights and responsibilities of both the buyer and the seller. It should include details about the transfer of title, property insurance, and who is responsible for paying property taxes. It is also essential to specify what happens in the event of default by either party.

4. Include the proper legal language

To ensure that the contract is legally binding, it is important to use the appropriate legal language and terminology. You should consult an attorney or a real estate professional for assistance with drafting the contract.

5. Consider including a balloon payment clause

A balloon payment clause is an essential option to consider when drafting an owner carry contract. This clause allows the buyer to pay a portion of the principal amount owed at the end of the payment schedule. It can help reduce the overall interest paid and make the property more affordable for the buyer.

In conclusion, an owner carry contract is an excellent option for selling your property without involving banks or financial institutions. However, it is essential to create a legally binding contract that protects both parties` interests. By including the elements outlined in this article, you can create a comprehensive owner carry contract that provides a clear and fair agreement between you and the buyer.

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