Avoid seller-financed debt trap

REThink Real Estate

Q: I have a ranch in Colorado that I sold and carried the loan for the purchase of the property. The buyers have been living in my home now for more than a year and have not paid me any money. I have a lawyer but it doesn’t seem right that they can continue to live off of others. This is putting us in debt, big time, because we can’t sell the ranch, and we’ve been told that’s the law. Is there anything we can do? –Brenda, Colorado

A: Contrary to (increasingly) popular belief, it’s not legitimate or legal to get something for nothing. The buyers have breached their obligations under the mortgage note, which I’m assuming you had secured with a deed of trust against the property.

When you extend seller financing, you become the buyer’s mortgage bank. And you know what happens when you stop paying the mortgage payments to a bank? Yep, they foreclose on the home and, eventually, evict you from the property.