Is it legal for a home owner to sell the home(Owner Financed) with out an inspection and appraisal.?

December 12th, 2010 | by admin |

Situation: Home owner is selling a home and doing owner finance on it. The property is worth a lot less than the selling price. Since they are doing owner finance, there is no appraisal or inspection. Is this legal? On a traditional mortgage, the bank uses the appraisal to determine if they can carry the note. In this situation, the owner is the bank. It seems like they are trying to scam the buyer. Can an atty chime in?

You do not have to make an offer on the home if you do not like the terms the owner is asking;

The bank is being up front, the asking price is X, well aware it will appraised for less, so they have to carry the note: Side Note: a savvy investor paying cash would never make the deal with the bank; but I will assume the terms of the loan are good for certain buyers even if its more then current appraised value

Nothing is stopping you by making an offer contingent on inspection, lender will probably expect with time line to inspect, but will not budge at this point lowering the asking price, either wait another six months to see if the home sits or make a cash low ball offer for once again Cash IS King

  1. 5 Responses to “Is it legal for a home owner to sell the home(Owner Financed) with out an inspection and appraisal.?”

  2. By Release the Kraken! on Dec 12, 2010 | Reply

    You’ve answered your own question. I won’t comment on the wisdom or ethical nature (or lack thereof) of what you’re about to do, but in such a private party transaction, an appraisal won’t be required except for special circumstances.
    References :

  3. By Sharon T on Dec 12, 2010 | Reply

    The buyer can and should make the written agreement contingent on a satisfactory inspection (and appraisal if desired). Earnest money should be held by the buyer’s attorney or an escrow company, not the seller.

    Any buyer should have legal representation. Otherwise, they are too vulnerable.
    References :
    Extensive experience with seller-financed mortgages, both as a buyer and seller.

  4. By goz1111 on Dec 12, 2010 | Reply

    You do not have to make an offer on the home if you do not like the terms the owner is asking;

    The bank is being up front, the asking price is X, well aware it will appraised for less, so they have to carry the note: Side Note: a savvy investor paying cash would never make the deal with the bank; but I will assume the terms of the loan are good for certain buyers even if its more then current appraised value

    Nothing is stopping you by making an offer contingent on inspection, lender will probably expect with time line to inspect, but will not budge at this point lowering the asking price, either wait another six months to see if the home sits or make a cash low ball offer for once again Cash IS King
    References :

  5. By Caveat Emptor on Dec 12, 2010 | Reply

    It’s up to the BUYER (not the seller) to get an inspection and appraisal and make any offer contingent on those. As my screen name says, caveat emptor: let the buyer beware.
    References :

  6. By Just there on Dec 12, 2010 | Reply

    Yes it is legal. It is the buyer’s responsibility to pay for an appraisal and home inspection plus hire a lawyer to protect their rights Buyer Beware
    References :

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