When buying or selling real estate using owner financing it is best to us an escrow company as the intermediary. The escrow company ensures the terms of the contract are upheld. Accidents, misunderstandings, and accounting errors have occurred since the beginning of bartering. Not to mention, scams and con-artists.
Using Sunwest Escrow creates additional security. An escrow company keeps detailed records of payments. And retains sensitive documents as a third party in a secure environment. Sunwest has escrowed thousands of accounts in New Mexico over the past 30 years.
Escrow is a contractual agreement to use a third party to hold and release funds, deeds, or other documents once the terms of the contract have been fulfilled. The terms and conditions of the contract are decided by the interested parites. The interested parties are the people who want something in exchange for something else. And, the escrow company agrees to act as a disinterested third party to follow the terms of the contract. The disinterested third party is paid separately to uphold the terms of the contract. They do not have any financial interest in the contract or agreement.
Real Estate Contracts
We service all types of contracts. However, the most common is the real estate contract, or REC. A real estate contract is commonly used much like a mortgage with one important difference. The bank isn’t involved.
The Difference Between a Mortgage and an REC
With a mortgage the buyer and seller agree to a sales price for the property. Then the buyer goes to the bank to ask for a loan of the sales price to buy the property. Then, the buyer and the bank make a deal for the buyer to pay back the loan to the bank (the mortgage). The seller is paid cash all at once and the buyer starts making payments to the bank. However, with a real estate contract the seller of the real estate acts as the bank. Ultimately, the owner takes payments over a specified period of time, and the bank is not involved at all. This process is often referred to as owner financing and is fairly common in New Mexico. If you would like to buy property without involving the bank ask your real estate broker to show you properties that offer owner financing.
As it turns out, owner financing and escrow services make it possible to transact a deal between two strangers with complete trust, and without the involvement of the banking system. To learn more about owner financing and escrow services find us on Youtube @SunwestEscrow. As an escrow company we believe knowledge is key.