If you are marketing and finding your own buyers, you will be drawing up the sales contact between you and your buyer. It is very important that this form is filled in completely and accurately! You will be balancing conflicting goals by being both the lender and the seller. For instance, larger down payments make it harder to find buyers—but larger down payments also make for better loans! Here are the areas you need to consider:

Title work: Are you going to require owners and lenders title policies? It is up to you. However, if you ever sell or pledge your Note as collateral, you may need the lenders title insurance policy. Even if you are not going to require title insurance, the buyer may wish to purchase this protection so have a discussion with your buyer and find out his wishes on the issue. If cost is an issue, consider a title search.

Where will you close? If you are not getting a title policy, then you don’t NEED to close at a title company. However, it may make the borrower feel more comfortable to have a closing at a third-party place of business.

Will you require a survey?

Who will draw your loan documents (Note, Deed of Trust, Warranty Deed, etc.). Lawyers at title companies will usually draw your documents for a fee. If you are not closing at a title company, how will you get these documents?

How will you service your loan? We will need to notify the buyer at closing where to make their monthly payments. Will you use a third party servicer?