Factoring Purchase Agreement With Seller Financing In Houston

State:
Multi-State
City:
Houston
Control #:
US-00037DR
Format:
Word; 
Rich Text
Instant download

Description

A factor is a person who sells goods for a commission. A factor takes possession of goods of another and usually sells them in his/her own name. A factor differs from a broker in that a broker normally doesn't take possession of the goods. A factor may be a financier who lends money in return for an assignment of accounts receivable (A/R) or other security.

Many times factoring is used when a manufacturing company has a large A/R on the books that would represent the entire profits for the company for the year. That particular A/R might not get paid prior to year end from a client that has no money. That means the manufacturing company will have no profit for the year unless they can figure out a way to collect the A/R.

This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.

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FAQ

Final answer: The interest rate in the Seller Financing Addendum is usually negotiated between the buyer and the seller, rather than being set by an external entity or fixed at a certain percentage. The rate may be finalized at closing.

In general, owner-financed interest rates in Texas tend to stay at around 8% or higher. This can be slightly higher than the rate set by traditional lenders. However, it's important to remember the advantages of owner-financing that make this higher rate worth it.

Possible foreclosure. If the buyer stops making payments and won't leave the property, you might need to start the foreclosure process, which could take months or even years.

SELLER FINANCING UNDER DODD-FRANK This new rule also applies to sellers of residential dwellings to consumers in which the seller provides financing to the consumer secured by a mortgage on the dwelling, unless the seller is entitled to certain exclusions.

Dodd Frank only applies to residential mortgage transactions secured by a dwelling. It does not apply to transactions involving commercial property, vacant land or investment property. Does the lender own the property?

In CA, we recommend putting it verbatim in paragragh 3. E (additional financing terms). We put in on our pre-approval letter. Include it in your agent cover letter.

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Factoring Purchase Agreement With Seller Financing In Houston