Valley Real Estate

A contract between the owner of the real property (called the "vendor" or the "seller") and a person who wants to buy the property (the "vendee", "contract purchaser", "purchaser" or "buyer") for an agreed-upon purchase price. Detailed information will be found here.

Any mortgage in which the seller is the principle lender. The seller is the 'bank' in this instance and carries a first position lien on the home.

In this case the seller offers a mortgage that is secondary to the principle lender and is often made to help the buyer make the down payment on the principle loan. The first lien is held by the principle lender and the seller's lien is subservient to it.

An alternative financing scenario that combines an Option To Purchase with a Lease Agreement. It allows the home buyer to lease a home with a formula to eventually buy it. A Lease Option is different than the so-called  lease-to purchase which, in Ohio, is legally treated as a land contract or installment contract. A lease-option give the tenant an option to purchase the home after a specified time which he can choose to exercise or not. A land contract obligate the buyer to purchase the home after a specified time.

Each month's rent payment consists of principal, interest, taxes and insurance (PITI) payments on the mortgage. Often there is included an extra amount that is earmarked for deposit to a savings account in which money for a down payment will accumulate.

See also - Real Estate guide: Your Mortgage - Lease Options

There are 3 forms of equity sharing:

1. First is the Traditional Agreement,
   • the Occupier lives in the property and pays all expenses;
   • the Investor pays most of the down payment and does not live in the property.
2. Secondly, Co-occupiers live in the property together and split the expenses.
3. Thirdly, Joint Venturors rent out the property together and split the expenses as well as the profits.

Read more: Your Mortgage - Equity Sharing Agreements

Both agreements are assumption loans used by sellers to  help finance the sale of real estate particularly when the seller (mortgagor) is in financial difficulty himself, and needs to sell the property to avoid foreclosure.

• An Assumption - is a transfer of the homeowner’s (mortgagor's) existing mortgage to a buyer in which the homeowner is released from any further liability of debt under the assumption. The new owner steps in the shoes of the seller as far as the mortgage is concerned.
• A Purchase Subject to Mortgage - is an Assumption mortgage in which the lender (mortgagee) does not release the homeowner (mortgagor) from the note and the homeowner remains liable for the debt should the new buyer default.