By Jenelle Etzel, May 15, 2023
During my divorce in 2011, I could not qualify to buy a home with conventional financing because my divorce wasn’t finalized. So I bought a home on a contract. I wanted to buy because renting feels like flushing cash down the toilet each month and a divorce is expensive enough!
I searched for homes where the seller had offered to carry a contract. What this means is that the seller owns the property free & clear and they make the loan for you personally. Sellers will usually request a large down payment for collateral. Usually 20-30% min. Expect to pay a few points higher in interest rates but with no closing costs to the bank, its a wash for the first two years vs. a bank loan. For example if current rates are 6% expect to pay 8% on an owner held contract.
The loan gets amortized for 15-30 years but most sellers ask for a 5 year balloon. This means the remaining balance is due in 5 years. This gives the sellers an option to be paid in full or elect to extend the loan. Since most folks who own homes free and clear are older or its held in an estate, it makes sense they don’t want to hold on to a loan for 15-30 yrs. Before the 5 year mark it’s the responsibility of the buyer to get a new loan from a bank or to sell the property and pay the seller back.
Once you come to terms on the purchase price, down payment, and loan terms the best thing to do is set up your payments with a professional company that will service the note. I called my local title office and they helped me find a reputable company that received my monthly payments, recorded them, and gave both the seller and I statements to track the loans progress.
There are so many great reasons for a Seller to consider selling to a buyer on contract. The #1 reason is the seller can make interest on top of the sales price, maximizing the value of the asset. With so much cash in the market over the past 10 years I expect to see more seller financing opportunities. And with interest rates at 5% + this gives Sellers an opportunity to make 7%+ on their investment.
For buyers going through divorce, bankruptcy, or self employed folks with good savings but low reportable income, and other life events that may keep them from qualifying for a conventional loan, this is a way to purchase a home and create a win-win for you and the seller.
Jenelle Etzel
President & Owner, Licensed Broker OR
She/Her
What does being lead singer and guitar player in a female punk band have in common with starting a real estate company in the middle of a recession? Not many people can answer that question. But when you ask Jenelle Isaacson Etzel founder and CEO of Living Room Realty, there’s no hesitation; where most would see a chasm, she sees a bridge.
For Jenelle, it’s all been about finding a voice—the singular and irrepressible expression of self. Once a quiet, studious, high-school girl growing up in Portland, Jenelle started a punk band after college. She played guitar, wrote cathartic songs, performed, and traveled across country while living out of a van. All that seems light years from the present moment--owning a successful, growing company; serving on boards of civic and philanthropic organizations; enjoying family life with her two young daughters and long-time partner. Still, she uses the same voice now that began to emerge on stage years ago.
Whether it’s business or music, “It’s important to know what your voice is. If it’s true, it will resonate.” Jenelle’s voice, her truth, is about being brave enough to take action without apology, being heard without being exploited, to be energized, constantly problem-solving and refining her skills in the pursuit of building a purpose-driven company. All this requires risk-taking. She’s learned the hard way that she can’t fix everything and that not everyone will share her vision. But even as she explains the difficult choices she’s faced, Jenelle radiates joy.
“It’s never okay to play small,” she says with conviction. And this, more than anything, is what she strives to impart to other women, empowering them to pursue their passion whole-heartedly and to be leaders who speak with their own unique, unapologetic voice.
Living Room Realty, founded in 2009, offers residential, commercial, and property management services. Living Room ranks in the top 15 real estate companies in Oregon, with more than 110 affiliated broker-agents. For more information, visit www.livingroomre.com.
Noted Achievements: First west coast real estate office to receive B Corp status • Top Workplaces, 2014-2016 • 100 Best Workplaces in Oregon 2017 • 100 Best Green Companies 2017 • Oregon Business in Ethics Awards in 2014 • Jenelle has been featured in The Portland Monthly, Oregon Business, and REALTOR® Magazine • Portland Business Journal 40 under 40 Business Leaders • Board of Directors, Rock n Roll Camp for Girls, receiving 2015 award for creative philanthropy • Board Member, Entrepreneurs’ Organization Global Network, Portland chapter • Orchid Award recipient for Business and Civic Contributions • Guest speaker: OPB’s Think Out Loud, Investor Beat, Cascadia Green Building Council • Advocate speaking on behalf of Benefit Corporation legislation with Oregon Secretary of State, Kate Brown
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- jenelle@livingroomre.com
