The Call – How long should it be?

This is one of  the most important features of Owner Financing, and often overlooked or determined by the seller. The seller should never determine this for the buyer. First and foremost, the buyer is using owner financing for a specific reason. It may be due to a low FICO score,  low down payment, low adjusted gross income, even bankruptcy. In each instance, the buyer needs a specific amount of time to rehabilitate his/her credit or adjust income. If there is not enough time built into the contract (the call) then the buyer is more likely to not have the oppertuinty to refinance the home into their name(s) entirely, thus forcing the sale of the home. If the call is too short the buyer may be forced to sell the home, and incur a loss if the purchase price and down payment of the next buyer is not enough to cover the costs associated with selling.If the property can not be sold, and the refinance can not take place, the buyer must forfeit the home and lose the initial down payment and any accrued equity.

In conclusion, a sound plan for the refinance transaction, and knowing what is needed to accomplish the refinance, is imperative. If the length of the call is not enough to accomplish the refinance, you are best to consider other properties where the call is satisfactory.