Owner Financing Escrow Services

5 Things You Need to Know about Owner Financing Escrow Services

There are many misconceptions about owner financing escrow services. And these misconceptions can lead to unfortunate circumstances. Signing an unknown contract can have life changing consequences. So, before you sign any contracts you need to know a few basics.

Sunwest Escrow is proud of the education we offer. Either through books, video, or in person. Both in english and spanish, we try to make information available. And, we strive to make information easy to understand and accessible. Here, I will give you the 5 things that will help you maneuver the world of escrow.

Owner Financing Escrow Services Albuquerque

  1. What is Owner Financing?

Owner financing is when a buyer and a seller agree to the purchase of a property without using a bank for financing. In essences, the owner acts as the bank. He allows the buyer to make payments over a given period of time, usually 30 years, but can be negotiated. The owner usually charges an annual interest rate for the buyer’s right to pay over many months, or years.

  1. What is Escrow?

Escrow is the process of holding documents or payments with a disinterested third party. Escrow is safekeeping while the terms of a contract play out. Payment, tax, and ownership disputes often arise without escrow. But is easily avoided when using a disinterested third party to hold deeds or documents.

  1. The Real Estate Contract is King.

The REC, or real estate contract, is the favorite owner-financing tool in escrow servicing. The real estate contract is much like a mortgage, without the bank. The REC is the document used to tell the world that a loan was made to buy the property. And, that this loan should be paid before any other loans backed by the property. For more information on real estate contracts you can watch this video:

  1. Disinterested Third Party

Someone who does not gain or lose whether the contract performs or not. The disinterested third party doesn’t take sides. They are impartial and only uphold the contact.

  1. Are there fees?

Understandably, sellers want their money when they sell a property. Interest is the only incentive to take payments over quick cash. But the interest rate is negotiable. The buyer and seller negotiate the interest rate.


And, there are fees for escrow services. An escrow services fee is collected with each payment to ensure the security of your escrow.


 For sellers interested in owner financing tell your real estate agent to explain owner financing options.

For buyers interested in owner financing tell your real estate agent to show you properties with the owner financing option available. 

Now you know. For more information about owner financing escrow services visit our Youtube page @SunwestEscrow.