This agreement contains a security agreement creating a security interest in the property being sold. A security interest refers to the property rights of a lender or creditor whose right to collect a debt is secured by property. A secured transaction is created by means of a security agreement in which a lender (the secured party) may take specified collateral owned by the borrower if he or she should default on the loan. Collateral is the property, that secures the debt and may be forfeited to the creditor if the debtor fails to pay the debt. Property of numerous types may serve as collateral, such as houses, cars, and jewelry. By creating a security interest, the secured party is also assured that if the debtor should go bankrupt he or she may be able to recover the value of the loan by taking possession of the specified collateral instead of receiving only a portion of the borrowers property after it is divided among all creditors.
The Uniform Commercial Code is a model statute covering transactions in such matters as the sale of goods, credit, bank transactions, conduct of business, warranties, negotiable instruments, loans secured by personal property and other commercial matters. Article 9 of the Uniform Commercial Code covers most types of security agreements for personal property that are both consensual and commercial. All states have adopted and adapted the entire UCC, with the exception of Louisiana, which only adopted parts of it.
A sale owner financed contract is a legal agreement between the seller and buyer of a property, where the seller acts as the lender and provides financing for the purchase. This contract eliminates the need for a traditional mortgage from a bank or financial institution, allowing buyers who may not qualify for a conventional loan to acquire the property. Keywords: sale owner financed contract, seller financing, seller acts as lender, financing, purchase, property, traditional mortgage, bank, financial institution, buyers, qualify, conventional loan. There are different types of sale owner financed contracts for sale, each catering to different buyer and seller needs. Some common types include: 1. Land Contract: Sometimes referred to as a contract for deed or installment sale contract, this type of financing is commonly used for the sale of vacant land or undeveloped property. The buyer agrees to make regular payments directly to the seller, who retains the title until the full purchase price is paid off. 2. Lease Purchase Agreement: This option combines a lease agreement with a purchase option. The buyer pays rent to the seller while having the option to purchase the property within a specified time frame. A portion of the rent may be credited towards the purchase price. 3. Contract for Sale: Also known as a bond for deed or agreement for sale, this contract involves the seller financing the purchase of a property. The buyer pays a specified down payment and then makes regular payments to the seller until the full purchase price is paid, at which point the title is transferred to the buyer. 4. Wrap-around Mortgage: Also called an all-inclusive mortgage or overriding mortgage, this type of contract allows the buyer to take over the seller's existing mortgage while paying the seller the difference between the existing mortgage balance and the agreed-upon purchase price. The buyer makes payments to the seller, who then continues to make payments on the original mortgage. 5. Contract for Deed: In this arrangement, the buyer agrees to make regular payments to the seller and takes possession of the property, but the seller retains the deed until the full purchase price is paid. Once the final payment is made, the seller transfers the deed to the buyer. 6. Installment Land Contract: Similar to a land contract, this type of sale owner financed contract allows the buyer to make installment payments to the seller over a specific period. The buyer gains equitable title while making payments, but the seller retains legal title until the contract is fully satisfied. By utilizing these different types of sale owner financed contracts, buyers and sellers can enter into agreements that suit their particular financial situations and goals.
Para su conveniencia, debajo del texto en español le brindamos la versión completa de este formulario en inglés. For your convenience, the complete English version of this form is attached below the Spanish version.
