Accounting Owner Financing Contract

I. Introduction

A. Purpose of the Contract

This Accounting Owner Financing Contract ("Contract") is established to formalize the financing arrangement between [Your Company Name] (the "Seller") and the Buyer for the purchase of the Property described herein. The purpose of this Contract is to set forth the terms, conditions, and obligations associated with the financing provided by the Seller to facilitate the Buyer's acquisition of the Property. It aims to ensure that both parties understand their rights and responsibilities and to provide a clear framework for managing the financial transaction.

B. Definitions and Interpretations

In this Contract, the following terms shall have the meanings assigned to them unless the context requires otherwise:

• "Property": Refers to the real estate or asset being sold and financed under this Contract. This includes all associated rights, interests, and appurtenances.

• "Buyer": The individual or entity purchasing the Property and agreeing to repay the financing amount. The Buyer is responsible for adhering to the terms of this Contract and making timely payments.

• "Seller": [Your Company Name], the party providing the financing and transferring ownership of the Property. The Seller has the right to enforce the terms of this Contract and collect payments.

• "Interest Rate": The percentage rate applied to the unpaid principal balance of the financed amount, as specified in this Contract.

• "Loan Amount": The total sum of money financed by the Seller to the Buyer for the purchase of the Property. This amount will be repaid according to the agreed terms.

C. Scope of the Agreement

This Contract governs the terms and conditions of the financing arrangement between the Seller and the Buyer for the Property acquisition. It encompasses the details related to the loan amount, interest rate, payment schedule, and any additional conditions relevant to the financing. This Contract is legally binding on both parties, as well as their successors and assigns, and is intended to ensure a clear and enforceable agreement.

II. Parties Involved

A. Buyer

1. Identification

The Buyer is identified as [Buyer's Full Name], residing at [Buyer's Address]. The Buyer shall be referred to as the party receiving financing from the Seller for the purpose of purchasing the Property. The Buyer agrees to the terms and conditions set forth in this Contract and acknowledges their responsibility to repay the financed amount as specified.

2. Contact Information

The Buyer’s contact information includes:

• Phone Number: [Buyer's Phone Number]

• Email Address: [Buyer's Email Address]

• Mailing Address: [Buyer's Mailing Address]

B. Seller

1. Identification

The Seller is identified as [Your Company Name], a company organized and existing under the laws of [State], with its principal office located at [Your Company Address]. The Seller will provide financing to the Buyer for the acquisition of the Property and will retain a security interest in the Property until the loan is fully repaid.

2. Contact Information

The Seller’s contact information includes:

• Phone Number: [Your Company Number]

• Email Address: [Your Company Email Address]

• Mailing Address: [Your Company Mailing Address]

C. Guarantor (if applicable)

1. Identification

If applicable, a Guarantor is identified as [Guarantor's Full Name], who agrees to guarantee the obligations of the Buyer under this Contract. The Guarantor provides additional security for the performance of the Buyer’s obligations, including the repayment of the loan amount.

2. Contact Information

The Guarantor’s contact information includes:

• Phone Number: [Guarantor's Phone Number]

• Email Address: [Guarantor's Email Address]

• Mailing Address: [Guarantor's Mailing Address]

III. Property Details

A. Description of Property

The Property to be financed under this Contract is described as follows:

• Property Type: Industrial

• Address: 456 Oak Avenue, Lincoln, NE 68508

• Legal Description: Lot 5, Block 3, Maplewood Subdivision, according to the plat thereof recorded in Plat Book 15, Page 12, of the Official Records of Springfield County, Illinois.

• Size and Features:

  Size: 0.25 acres (10,890 square feet)

  Number of Rooms: 3 bedrooms, 2 bathrooms

  Special Features: Newly renovated kitchen, hardwood floors, attached two-car garage, and fenced backyard.

This description includes all improvements, fixtures, and appurtenances associated with the Property.

B. Valuation

1. Appraised Value

The Property has been appraised at $350,000 by an independent appraiser. This valuation serves as the basis for the financing amount and reflects the fair market value of the Property at the time of the Contract.

2. Purchase Price

The agreed purchase price of the Property is $340,000, which represents the total amount to be financed by the Seller. This price has been negotiated and accepted by both the Seller and the Buyer.

C. Additional Terms and Conditions

1. Condition of Property

The Buyer acknowledges that the Property is sold "as-is," and the Seller makes no warranties or representations regarding its condition. The Buyer has had the opportunity to inspect the Property and accepts it in its current state.

2. Compliance with Laws

The Buyer agrees to comply with all applicable local, state, and federal laws and regulations regarding the use, maintenance, and improvement of the Property.

IV. Financing Terms

A. Loan Amount

The Seller agrees to finance the amount of $250,000 for the purchase of the Property. This amount will be disbursed to the Buyer upon closing of the transaction and will be repaid in accordance with the terms specified in this Contract.

B. Interest Rate

The interest rate applied to the financed amount is 6.5% per annum. This rate will be fixed and will be used to calculate the interest on the outstanding principal balance.

C. Payment Schedule

1. Payment Terms

The Buyer agrees to make monthly payments of $4,500 to the Seller. Payments will be due on the [Due Date] of each month/quarter and will continue until the loan is fully repaid.

2. Payment Method

Payments shall be made via bank transfer, check, or electronic payment. The Seller will provide the necessary payment instructions to the Buyer.

D. Prepayment Terms

1. Prepayment Option

The Buyer may prepay the loan in whole or in part at any time without penalty. Any prepayment will be applied to the outstanding principal balance, and the interest calculation will be adjusted accordingly.

2. Notice of Prepayment

The Buyer must provide written notice to the Seller of any prepayment, including the amount and date of the prepayment.

E. Default and Remedies

1. Events of Default

The following events will constitute a default under this Contract:

• Failure to make any payment when due.

• Breach of any other term or condition of this Contract.

• Insolvency or bankruptcy of the Buyer.

2. Remedies

In the event of default, the Seller may:

• Declare the entire unpaid balance of the loan immediately due and payable.

• Seek legal remedies, including foreclosure on the Property if necessary.

• Pursue any other remedies available under applicable law.

V. Closing Procedures

A. Closing Date

The closing of the transaction will take place on [Closing Date] at [Closing Location]. The exact time and date may be adjusted by mutual agreement of the parties.

B. Documentation Requirements

1. Required Documents

The following documents are required for closing:

• Signed Contract

• Proof of insurance for the Property

• Title deed and title insurance

• Any additional documents as required by local regulations

2. Delivery of Documents

The Buyer and Seller shall deliver the required documents to the closing agent in advance of the closing date. Each party will be responsible for providing their respective documents and ensuring their accuracy.

C. Transfer of Ownership

1. Transfer Process

Ownership of the Property will be transferred from the Seller to the Buyer upon successful closing. The Seller will deliver a duly executed deed or other required transfer documents to the Buyer.

2. Recording of Transfer

The Buyer is responsible for recording the transfer of ownership with the appropriate governmental authority, if applicable, and for paying any associated recording fees.

D. Settlement of Taxes and Fees

1. Property Taxes

The Buyer shall be responsible for all property taxes incurred after the closing date. The Seller will be responsible for taxes up to and including the closing date.

2. Closing Costs

The Buyer and Seller shall each bear their own closing costs. The specific closing costs include fees for legal services, title insurance, transfer taxes, and any other charges associated with the transaction. The allocation of costs will be as follows:

Buyer’s Costs:

Title Insurance: $1,200

Legal Services: $1,500

Transfer Taxes: $2,000

Recording Fees: $150

Appraisal Fee: $400

Seller’s Costs:

Legal Services: $1,500

Title Insurance: $1,200

Real Estate Commission: $10,200 (based on a 3% commission on the purchase price)

Transfer Taxes: $2,000 (if applicable)

VI. Representations and Warranties

A. Seller’s Representations

The Seller represents and warrants the following:

• Ownership: The Seller is the lawful owner of the Property and has the right to sell and finance it.

• No Encumbrances: The Property is free from any liens, encumbrances, or claims other than those disclosed to the Buyer.

• Compliance: The Seller has complied with all relevant laws and regulations related to the Property and the transaction.

B. Buyer’s Representations

The Buyer represents and warrants the following:

• Financial Capacity: The Buyer has the financial capacity to repay the loan as specified in this Contract.

• No Violations: The Buyer is not in violation of any laws or regulations that would affect their ability to perform under this Contract.

• Intent: The Buyer intends to use the Property for lawful purposes and will not engage in any activities that would result in legal violations.

C. Dispute Resolution

In the event of any disputes arising under this Contract, the parties agree to resolve such disputes mediation or arbitration, before seeking judicial intervention. The resolution process will be conducted in accordance with the rules of the Arbitration Body.

VII. Miscellaneous Provisions

A. Governing Law

This Contract shall be governed by and construed in accordance with the laws of [State]. Any legal actions or proceedings arising from this Contract will be conducted in the courts of [Jurisdiction].

B. Amendments

Any amendments or modifications to this Contract must be made in writing and signed by both parties. No oral statements or representations will have any binding effect.

C. Severability

If any provision of this Contract is found to be invalid or unenforceable, such provision shall be severed, and the remaining provisions shall continue in full force and effect.

D. Entire Agreement

This Contract constitutes the entire agreement between the parties and supersedes all prior agreements, representations, and understandings, whether oral or written.

E. Notices

Any notices required or permitted under this Contract shall be in writing and delivered to the addresses specified herein. Notices may be delivered by hand, mail, or electronic means.

VIII. Signatures

A. Seller’s Signature

The undersigned Seller, [Your Company Name], agrees to the terms and conditions set forth in this Contract.

Print Name: [Authorized Signatory's Name]
Title: [Authorized Signatory's Title]
Date: [Date]

B. Buyer’s Signature

The undersigned Buyer agrees to the terms and conditions set forth in this Contract.

Print Name: [Buyer’s Full Name]
Date: [Date]

C. Witnesses (if applicable)

Witnesses to the signing of this Contract, if required, affirm that the signatures provided are authentic and that the parties have entered into this Contract voluntarily.

Print Name: [Witness 1 Name]
Date: [Date]

Print Name: [Witness 2 Name]
Date: [Date]

Accounting Templates @ Template.net