Legal Question in Real Estate Law in Georgia

That is between you and the buyer, and part of your contract (prepared by your real estate lawyer). Keep in mind there is a reason they are asking you to finance it - they probably have poor credit and can't get a loan. Obviously you should keep that in mind and discuss with your lawyer.

You are certainly entitled to charge your home buyer interest on the loan you are giving him, and of course, you should draw down the principal balance every month. The biggest issue is why you are choosing to seller-finance your home. When a purchaser asks you to seller-finance this is a BIG RED FLAG about your buyer. It likely means your buyer has bad credit and little income/savings. In short, your buyer likely cannot qualify for a traditional loan because he's too big of a risk, so he's asking you to take the risk instead. If (and likely when) your buyer stops paying your loan back, do you know how to remove him from your home? If your buyer stops paying your loan back and refuses to leave the home, do you know to handle it? If your buyer DESTROYS your home and property and stops paying the loan, do you know how to handle it? As you can see, there are many real hurdles to deal with when entering into this type of sale.

I would strongly recommend that you hire a Georgia real estate lawyer to assist you in preparing the appropriate documents to complete the sale. Courts do not like these types of arrangements and typically try not to enforce them (another problem for you if your buyer doesn't make good on his loan payments), so it's important to have documents that are buttoned up tight.

Best of luck.*****The above is for informational purposes only and does not create an attorney-client privilege.******

First of all, this is almost always a VERY VERY bad idea! When a buyer wants you to hold the note, you are very likely to not get paid. The reason he wants you to do it is his credit is awful and real lenders refuse to deal with him.

If you decide in spite of that warning to proceed, expect late payments, bankruptcy, foreclosure and lots of legal fees down the road. They are likely. You really need to rethink this.

To proceed you MUST hire an experienced lawyer to draft the sales contract. Do NOT use one presented by the buyer unless your lawyer approves it. And you need YOUR lawyer to close the sale, NOT his. You should insist on a significant down payment and you should charge a high interest rate since you are taking a huge risk. I would also suggest you require the buyer to submit credit reports, references, etc and check them.

Best of luck!