Owner financing question

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Owner financing question

I am looking to buy a piece of property
in Pike County Pennsylvania the owner is
willing to hold the financing I just
want to know how I can protect myself
against liens Builders liens title
issues or if he decides to keep it and
not record any of my payments so on and
so forth

Asked on March 21, 2018 under Real Estate Law, Pennsylvania

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Everything--and we mean EVERYTHING--must be documented and done in a way that is later provable. No oral agreeements--all agreements in writing. No cash payments or checks/money orders made "to cash": all payments by check, money order (or best yet: electronic funds transfer) to this person. All communications in writing--at least by email or text, so you can print it out and keep hardcopy.
Also, comply 100% with all your obligations: don't give him any excuse to declare you are in breach of the contract.
The above will help, but as you note, as long as the title is still in his name, he could mortgage it; he could be sued and someone could put a lien on the home; he could sell the home; he could die and will it to another. In some cases, you could then use your documentation to bring a lawsuit and recover the home, but that will not always work--and you'd have to go to the trouble and expense of suing. Owner-financed purchases are simply not as straightforward or secure as more traditional transactions.


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