Another reason some want owner carry properties is because ALL their money goes toward their equity with exception of appx. $500 in escrow fees and  insurance. They avoid the Lenders origination fees, doc fees, underwriting...etc., that go in the pockets of the lending people instead of OFF the balance of the price..!!

Then Nevada has the Contract for Sale and the All Inclusive Trust Deed... which are similar to what other states refer to as a Wrap Loan. Both have some risk involved.

When Jimmy Carter was president, I had 2 sales halted in escrow the DAY Congress passed the law to require the Exceleration Clause on assumption of existing loans, with the exception of FHA up to about 1986.  What this means is that if you try to go around that and have an owner carry you, IF the exisitng lender finds out, then the lender has the right to call the entire balance of the existing loan ALL Due and Payable. 

How do they find out?  Usually by recording of the transactions, changing the tax liability , or changing the insured names ..!  Tricky Stuff..! Just like when IRS makes new Tax law changes there are ways to 'avoid' not 'evade' those taxes.  **So question any AGENT trying to finance your purchase on a Contract For Sale or an A.I.T.D. as to how many of these types of transactions they have done and IF they have an attorney review it.

Another risk involved with the Buyers is how to insure them for both their personal belongings and their EQUITY in the property! The buyer can't buy home owners insurance because the existing lender has required the owner to have it. It would be Insurance Fraud to have 2 policies on the same property. There are a few Insurance Agents here that DO know how to handle this situation but, don't just settle for having a Renters Policy because that DOES NOT take care of your Equity (money down) in the property!

A customary downpayment is usually at least 10% of the Sales Price because you must remember the sellers are paying anywhere from 6-8% of the Sales Price in commissions to the REALTORS involved and then they have other closing costs on top of that.

There will be an Escrow Account set up where you will make your payments and THEY will send payments into the existing lender on behalf of the owners. This assures the buyers their money is going to the right place.

Usually the interest rate on the OWC contracts is higher than the going rate but again you don't have the excess up front money costs. You as a buyer, since you don't want to or can't qualify for a loan, will give sellers an advantage of higher interest than they can get if they had CD's and a monthly income while they relocate or vacation..etc.  Don't expect to low ball a seller when you ask them to be your bank..!

The most important thing will be for you to get a Renters Insurance Policy to protect your personal property. 

You get to start buying immediately and deduct the interest off your income taxes! Renting is just money down the drain and no one needs that not even for 6 months. All your money down comes directly off the price instead of $3000 to $5000 or more for lending fees.
You are in good hands when trying to buy a home with agents that know creative finance! Never give up.. if you get turned down for a loan, it's doesn't mean you still have to rent.
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