Should we carry the mortgage?
Our potential buyer has a new business with a short track record. He's not sure if he can get financing yet (we're in the early negotiating stages) and has asked if we'd be interested in carrying the mortgage. We've known him for about five years and feel good about him on a personal level.
If I understand correctly, we'd have a lien on the house, which would protect us in the event of default. I also know we'd need to come up with the cash to pay off our own mortgage. He is talking about a 20% downpayment. I am thinking that we will probably pay some percentage for the cash to pay off our current mortgage and will charge him more, thereby making a margin of a few percentage points.
Of course, I'd rather not engage in this creative financing, but if it's the easiest way to sell, then I am open to the possibility. Otherwise, we get a realtor, put it on the market, wait and see and then pay commission.