We have been asked by well qualified buyers to take a contract of sale on our house. The buyers are willing to put 25 to 39 percent down, and we would carry the rest in a contract at 6% for six years, with a balloon payment at the end.
Our question is not about what happens in case of default. Rather our concern is if by taking a contract, we are more liable in the event that the buyers have second thoughts, or find something wrong with the house, and stop payment. Are we more liable by taking the contract ourselves, as opposed to the buyer getting conventional financing on a first and taking us a second?
The interest income is welcomed, but we worry about additional risk of not being at arms length with the buyer. These seem to be high end, qualified buyers. He is the head of the planning commission of a large CA city. Thanks