Selling Gone Wrong

So, I thought I would do some creative financing deal with a purchaser, but now it’s going south. Here are the details:

They bought thehouse for basic asking price - $75,000,
7% interest
$20,000 Down
After 15 days late $50 fee
Contract is through a bank

Basically, the first payment was expected on Sept. 1 and the $50 late fee kicks in on the 15th. No payment has been made, nor any contact with me or the bank. What should my next steps be or am I jumping in to soon? When can I start the process…and what process forfeiture, foreclosure, etc.?

Thanks for your help.


If this transaction was recorded and you are the note holder your only option is foreclosure!

But I sure wouldn’t panic as with $20k down, I would guess these folks are on vacation, get paid every other week, had a momentary Brain _______, or just have started out with the first month late.

Give them a chance, you can’t do much to change things until you reach your states legal requirements to file a “Notice of Default” and start the foreclosure process, I just hope your not in a state it takes a year or more to foreclose.

If this is a recorded transaction and you are the note holder, do not enter the property illegally as you have to stay in compliance, and unlike a rental under a legal sale the new home owner has right’s! Are you sure the first payment is due in September? If it was escrowed it’s possible the title company set it up as paid interest and first payment 45 or 50 days after closing?

Good luck,


What Gold River said. The first month’s payment is often paid in escrow.

Make double sure that the payment really is due and then send them a written notice that you didn’t receive the payment.

Couple of things, we had a 3 day weekend which messes up mail delivery no end.

They think the payment isn’t due until the 15th, because that is when the late fee starts. But let them know you are going to be watching for that payment like a hawk and aren’t going to be flexible.

Thank you for the posts. I guess I wasn’t too concerned knowing that I had the large down payment, but knowing when to start filing the proceedings.

But that is all behind us. I spoke with the purchaser and he made the payment 20 days ago. The financial institution never caught the issue until both of us called. They had credited someone elses account. But we are in the good now.

Again, thank you for the posts

Wait, I know you got covered now, but dude…if the late fee doesn’t kick in til the 15th then they have no pressing reason to pay you on the 1st! Most people just don’t do that ya know (pay over 2 weeks before the late fee). Even as of today they’re still within the grace period you gave them.

Plus you got 20 grand of their money (on a $75k house) are you kidding me??? Heck you almost hope they DON’T pay you. lol

Yeah, it is a pretty great deal. We have a five year balloon on it too.

It was amazing at closing though. We had to add so many items (no late fee, alterations, assignment, etc. was included in it). So it was good we had something for a late fee. What is the typical late fee date?

I tip my hat to you, that’s a killer deal. If I may ask, how did you buy it? And how’d you find a buyer with $20k down on a $75k house? Either you’re real lucky or real good. :shocked

I’d say the 10th through 15th is a standard late fee date for most mortgages.

I bought it cash, but had some great help through a realtor. She set it up, I was just the guy with the perfect house for them.

Nice scheme, I think you will definitely join it.