Why Seller Financing?

Seller Financing (Owner-Carry) is Most Often Undertaken For the Following Reasons:

  • ** I want top-dollar for the property (or maybe a bit more), and I’m willing to wait a while for it
  • ** I want more monthly income than I could get from a traditional (conforming) sale or lease today
  • ** I don’t want to pay real estate commissions and closing costs
  • ** I don’t have time to wait for a conventional buyer with great credit and a full down payment
  • ** I’m willing to “carry paper (keep the current mortgage in place)” in order to avoid the rigmarole of a traditional financing approval and closing
  • ** I can’t sell conventionally because the property is over-encumbered and I can’t afford the pay-off
  • ** I’ve tried for a short sale or loan modification and was rejected
  • ** The property is too much in need of repairs and there is too little equity for me to afford selling to a traditional mortgage-borrower
  • ** I’ve borrowed on the prperty and will now owe way too much income tax if I sell traditionally
  • ** I want monthly cash-flow and furture profit from this property…’after the sale is made
  • ** I’m in foreclosure (or about to be) and need someone to take the property and payments over to avoid the credit damage
  • ** I’m in foreclosure and will do anything in my power to prevent the bank from getting their crooked, ill-gotten windfall profit at my expense

Standard Vehicles Used (Perhaps All Too Often) For Seller-Assisted (Seller-Carry) Real Estate Acquisition and Disposition:

  • ** The Lease Option (a unilateral option to buy until a stipulated future date)
  • ** The Lease Purchase (a bi-lateral contract to buy at a specific future date)
  • ** The Equity Share (‘one party makes or carries a down payment, while another lives in the property  covering all payments for a stipulated time, following which the property is sold and the net profits proceeds are divided between them)
  • ** The Contract for Deed/Land Sale Contract  (a buyer [vendee] makes payments to the seller [vendor] until the property is paid-for, at which time the Deed is transferred )
  • The Seller-Carried All-Inclusive Mortgage/”Wrap,” or “All Inclusive Trust Deed” (a loan is made to a buyer that is larger than the existing loan/s on the property: the seller then receives payments on the larger amount, from which existing liens are paid, with the overage being taken in as monthly cash-flow)
  • ** The Rent to Own (‘analogous to a lease option…’just a more marketable term and a contract that can, if opted for, be set on a month-to-month rental basis)

Why The ODWM EHTrust Transfer® Is (‘Should Always Be) Used In Any Seller-Carry Scenario.  Here’s What I Demand of a Seller-Carry Transaction:

  • ** I want to make top-dollar on this property
  • ** want a larger market to sell to. There are thousands more buyers with marginal credit and minimal cash than there are those with big savings and perfect credit
  • ** When I “carry paper” for a buyer, I have to know that I am avoiding the triggering of a mortgage lender’s alienation provision (i.e., ‘avoiding violation of the Due-on-Sale Clause)
  • ** I want to leave my existing mortgage in place, but never worry about difficulties with foreclosure, eviction and dispossession of a defaulting tenant-buyer
  • ** I want to avoid any threats against the property: creditor judgements, IRS liens, marital dissolution litigation, bankruptcy actions, and Probate Administration
  • ** I want to avert any illicit, untoward or potentially deleterious secretive actions by my resident-buyer, ‘which would (could) severely impact me: personally, legally or financially
  • ** I have to avoid payment of onerous income tax on any realized capital gain that would result from a traditional sale of the property (…’at least until the termination of the trust agreement some years in the future (‘at which time IRS§1031 Exchange privileges can be invoked to further defer such taxation)
  • ** It’s important that all mortgage payments and other disbursements be handled by a third-party collection and bill-paying service: not one of the parties int he transaction
  • ** I choose to shield (hide) my ownership in real estate from public view (e.g., creditors, lawyers, the government, nosy neighbors and family)
  • ** I want to be able to pass income full tax write-off benefits to my lease tenant/s in exchange for higher rents and freedom from landlord worries and expenses (i.e., management, maintenance, collections, homeowners dues and citations, repairs, insurance and property tax)


As most may know, a standard real estate sale and transfer is accomplished by a seller’s receiving requisite compensation and placing another party on the property’s title (i.e., on the deed) as a new owner.  Depending on the area in which the property is located–the deed (‘grant deed, warranty deed, or bargain and sales deed) is executed and transferred by means of a third-party “escrow” process, by either an officer of a state-licensed and bonded escrow company; a settlement official within a title insurance company; an attorney; or by the real estate broker responsible for the sale.

HOWEVER, in a bonafide ODWM EHTrust Transfer®), much of the expense and time-drain of an ordinary real estate transaction is eliminated.  For example, rather than one’s granting the title to a buyer, the property-owner can vest the property’s title in a third-party trustee, who acts as title-holder for the beneficiaries of the nominee trust (‘most commonly referred to as an Illinois-type “Land Trust”), which is the foundation of the ODWM EHTrust Transfer®.  By handling the transfer in this manner, control by the settlor (‘the owner of record) and power-of-direction over the actions of the trustee are retained and the “buyer need not be granted full title until the transaction terminates some years in the future..

person executes a triple-net occupancy agreement with the trustee.  A this point, all the benefits of ownership have been passed to that party…the resident beneficiary…’without the necessity of placing the acquiring party on title until the loan is retired, the trust and occupancy agreement are terminated, and the resident beneficiary either sells or refinances in its own name some months or years later.  At the point of sale (at the trust’s stipulated termination date), any equity you may have held at the inception of the agreement is paid to you, the non-resident (seller) beneficiary, along with any monetary contribution you may have made during the course of the agreement (‘if any).  The remainder of all net proceeds are then divided between the parties with respect to their respective percentages of beneficiary interest in the trust (fully agreed-to at inception).

Note that during the course of the agreement the resident beneficiary is bound by contract to cover all costs of ownership (e.g., mortgage payments, property tax, insurance, management, homeowner’s dues and maintenance).

By use of this very safe and convenient method of transfer (the ODWM EHTrust Transfer®), you, the trustor (settlor), are afforded 100% of the benefits of having sold the property on a contingency sale basis (‘just as one might be with any riskier means, such as, say, a Contract-for-Deed, an Equity-Share, a Lease Option or All-Inclusive Mortgage)…none of which provide the added benefit of virtually perfect asset protection (re. the property).

ANY owner of ANY TYPE of real estate would be well-advised to remove his/her identity from the public record and the resultant exposure of their real estate assets to the public.  This kind of protection is easily accomplished by placing the property (‘land, single family house, condo, townhouse, PUD (“Planned Unit Development”), commercial project or mufti-unit building) into the title-holding land trust


Ease of Tax Reporting and Record Keeping. 

Ease of eviction.  ‘Even though the EHTrust resident beneficiary enjoys full ownership benefits, he/she is never an owner of the property, until the trust terminates and the mortgage is retired (‘the trustee is the legal and equitable owner at your beckoning throughout the term).  The tenant beneficiary is only an owner per se of beneficiary interest in the entity that owns the property (the trust).  Therefore, in the event of a default, a tenant eviction is all that’s needed: versus the costly, exasperating and time-consuming judicial foreclosure and ejectment actions necessary to cure default in other owner-carry scenarios.

Versatility.  It’s important to know that the safe and effective ODWM EHTrust Transfer® can be easily structured to accommodate the intent and purpose (and all the benefits) of any creative contingency financing device, such:  the lease option, the land sale contract, the contract-for-deed, the equity-share, the lease, the lease option, the lease purchase or the tax-lease (e.g., a rental tenant can be given full tax benefits without a title transfer, and without any participation in future profits)…’all without any of the down-sides of “creative financing” schemes and devices…’including avoidance of spiritually any lender’s due-on-sale clause (i.e., the admonition against title transfer without express lender  permission).