Frequently Asked Questions

Have questions? Click below to learn more. You can also reach us through our chat or by calling 1-877-890-2899.

Real Estate Agents

Home Buyers

Home Sellers

FAQ – Real Estate Agents

How can seller financing help me?

Seller financing is just another strategy that you can offer to your clients based on their needs and financial situation. 

Seller financing has been used by sophisticated real estate investors to take advantage of the upside of the sale, which is twice as much as taking a lump sum. You can now offer this strategy to your clients. 

  • Sellers earn 2x more on their sale. Check out the numbers here: https://app.honestdeed.com/ 
  • Buyers with good credit and income who want to opt out using a traditional mortgage 
  • Faster closings 

This strategy can be a great offering to your clients, where they will receive many benefits and you will come out as the hero. 

What value can HonestDeed bring me?

HonestDeed has standardized seller financing. Before, seller financing was a laborious process for the agent which required handling background checks, paperwork, title searches and much more. Now HonestDeed has made all of this digital with our app. 

We make it easier for you to now include seller financing as part of your strategy so you can offer clients an innovative solution while providing faster closings.

Does HonestDeed take a cut of my fee/commission

No, you keep all your fees.

Who is responsible for paying the commission(s)?

The commission fee process does not change. The seller and/or buyer pay their respective fees to their agents. 

Are there any realtor fees to use HonestDeed?

There are no realtor fees due to HonestDeed. HonestDeed collects a structure fee at closing that is split between the buyer and seller, but there is no cost to you. 

We also collect a small maintenance fee from each of the seller’s monthly payments (no cost to you). If you’d like to learn more, just give us a call at 1-877-890-2899.  

The fee that HonestDeed collects, what are my clients getting for it?

When your clients use HonestDeed they get additional benefits plus safety and protection measures they would not get with a standard seller financing agreement. This includes: 

  • A vetting process for buyers and sellers; we use ID verification, background, and credit checks 
  • Collect payment easily through our app 
  • Sellers receive quarterly financial health checks on buyers 
  • For sellers needing more cash upfront, they can receive 20% of the outstanding balance after the down payment 

What happens if the buyer ends up getting evicted and my client's home depreciates in value?

We understand this may be a question your client has when considering seller financing. Part of the agreement terms is that the buyer will protect and maintain the home or property. HonestDeed does monitor the property over time by having the buyer submit photos. However, in the end this is a potential risk that the seller needs to consider. If the seller has concerns, you can consider a higher down payment to mitigate the risk as an option. 

We are happy to talk through this since every situation is different. Feel free to give us a call or chat with us. 

 

Does HonestDeed offer insurance for my seller’s home?

No but we do require the buyer to purchase home insurance. 

 

Can I use HonestDeed for commercial deals?

At this time we are evaluating commercial deals on a case-by-case basis. Contact us so we can discuss more: 1-877-890-2899.

Can I use HonestDeed for land deals?

Yes, you can use HonestDeed for land deals. 

Can I use HonestDeed for farm deals?

At this time we are evaluating farm deals on a case-by-case basis. Contact us so we can discuss more: 1-877-890-2899.

 

I am concerned about the potential liability of offering seller financing to my clients. How does HonestDeed help alleviate this?

HonestDeed provides a safety layer to real estate agents by serving as a separate entity. We execute the seller financing deal. As an agent, you can provide the option of seller financing to your clients and recommend they review the option with a financial advisor. If you have more questions, we would love the opportunity to speak to you more and help answer your questions. Call us at 1-877-890-2899.

 

Is HonestDeed handling the title process or are you using a company?

A title company and attorney will be used to record the deal. 

I know that HonestDeed sits on the title. Is that optional?

Yes, HonestDeed offers to sit on the title as an added protection benefit to the seller where in the rare case of default we would handle the eviction process quickly. However, if there is another arrangement preferred, we are happy to accommodate.

If I have existing seller/owner financed deals, can I add them to the HonestDeed platform?

Yes! Our team can walk you through the process of adding them, just give us a call at 1-877-890-2899.

FAQ – Home Buyers

What does HonestDeed exactly do?

HonestDeed has digitized the seller financing process for home buyers and sellers with a mobile app. HonestDeed acts as the facilitator by providing a safe seller financing platform with our mobile app. The app is used for the following:

  • Sellers list their homes for sale that they want to seller finance and where prospective buyers can browse seller finance homes

  • Sellers set terms and parties can negotiate

  • Sign the agreement

The other role HonestDeed plays is collecting payments from you and distributing them to the seller through the bank accounts linked within the app. We also collect property taxes in an escrow account and pay them on your behalf.

What is seller financing?

Seller financing is a real estate agreement where the seller of the home provides the loan to the buyer, bypassing the need to use a bank or lender. In fact, seller financing has been around for decades and last year alone there were $27 billion in transactions done. 

Since there is no involvement from a bank or lender, the buyer receives more flexibility with terms while the the seller gets to collect monthly principal and interest payments and 

To learn more about seller financing, how it works, and the benefits click here.

If I qualify for a traditional mortgage, why use HonestDeed?

There are many benefits to using HonestDeed over a traditional mortgage:

  • More flexibility by being able to negotiate terms of the agreement such as the down payment, interest rate and length of the loan. Traditional mortgages have strict rules in place when it comes to terms, whereas, HonestDeed doesn’t.

  • Faster closing time. Most mortgages take 30-60 days to close. Since there is no bank involved with HonestDeed, you get to close in days. Getting you into your dream home faster.

  • There is more monetary upside to the seller, so you may have an advantage over other buyers in the market who are competing with all cash offers or bidding over the asking price.

  • Option to pay off future payments in advance without any penalty fees. For example, if you receive additional income during the loan term (i.e. an annual bonus) you can use it towards future monthly payments.

What’s involved during the application process?

We believe that everyone should have the opportunity to own a home so instead of an application process, we determine an amount “that you can buy”. We collect the following information to determine the amount that you can buy:

  • Name, Address, DOB, Social Security, Income (W-2 / 1099)

  • Photo ID

  • Two years of past bank transactions through our trusted partner, Plaid

Do I need a down payment?

That is between you and the seller, all terms are negotiable, but the seller will likely want at least some amount of down payment. If a down payment is of concern, you could propose to the seller a higher interest rate or longer length of loan to compensate for a lower to no down payment.

When using HonestDeed, who holds the title to the property upon close?

Just like with a traditional home sale, you will be on the title upon close. The only difference from a traditional home sale is HonestDeed will also be on the title to protect the seller from any prolonged period of payment defaults.

What responsibilities do I have upon closing?

You have bought the home and are the title holder. Congrats, you are now officially a homeowner! This means you are responsible for monthly payments, taxes, insurance and maintenance. It’s full homeownership, the only difference is you did not need to get a traditional mortgage from a bank to purchase the home.

What responsibilities does the seller have upon closing?

None. They have sold the home to you just like a traditional home sale.

How will HonestDeed be involved after closing?

HonestDeed will continue to be involved after closing. We will:

  • Collect payments from you and distribute them to the seller through the bank account you provided

  • Collect property taxes in an escrow account and pay them on your behalf

  • Run a routine financial health check every 90 days

Don’t forget we are here to help answer any questions you have, even after closing. Just give us a call! 1-877-890-2899

How am I protected when using HonestDeed?

HonestDeed is committed to keeping you safe and protected, so we have worked to implement the following safety and protection measures:

  • HonestDeed vets the seller with an ID verification check

  • HonestDeed reviews and approves all home listings before they make it onto our platform

  • The agreement is structured towards you and the seller. It is standardized and developed by a third-party attorney hired by HonestDeed, keeping the agreement fair and balanced

  • HonestDeed sits on title with you, partnering with you throughout the entire agreement

How will I make my down payment and monthly payments?

HonestDeed handles the collection of payments and distributes them to the seller. You’ll make your payments directly from your bank account through the HonestDeed app.

What happens when I decide to move on and sell the home?

The process is no different than with a traditional home sale. You put the home up for sale, find a buyer and close.

Once you receive the payments from the new buyer, you just pay off the seller and any accrued interest to that date, and you get to keep any remaining proceeds from the sale.

What happens if I choose to refinance the property with another provider?

We would be sorry to see you go, but if you choose to, you would just have your new finance provider pay off the outstanding loan balance to the seller, just like in a traditional refinance.

What happens to my financial account information post close that I provided during the approval process?

HonestDeed is committed to keeping you and the seller safe during the agreement. We run a financial health check every 90 days to make sure you are on track to continue monthly payments. If we see any signals that you may need guidance or tips, we’ll be here to help you.

Who pays taxes and insurance on the property?

Since you are the owner of the home (congrats!) and are on title, you assume all responsibility. This means you are responsible for taxes, insurance, maintenance, HOA fees and any home improvements.

Who is responsible for improvements and repairs to the home?

As the owner of the home, you are responsible for all aspects of the property, including improvements and repairs.

What happens if the seller passes away?

You will continue providing monthly payments that will be passed on to a beneficiary listed in the agreement.

What happens if HonestDeed were to cease to exist as a company?

Your loan schedule and payments will be transferred to a servicer, who within 30 days will become the new intermediary for payments and distributions.

FAQ – Sellers

What does HonestDeed exactly do?

HonestDeed has digitized the seller financing process for sellers and buyers with a mobile app. HonestDeed acts as the facilitator by providing a safe seller financing platform with our mobile app. The app is used for the following:

  • Sellers list their homes for sale that they want to seller finance and where prospective buyers can browse seller finance homes

  • Sellers set terms and can negotiate

  • Sign the agreement

HonestDeed also moves funds between parties. We collect the payments from the buyers and distribute them to the seller through the bank accounts linked in the app.

What is seller financing?

Seller financing is a real estate agreement where the seller of the home provides the loan to the buyer, bypassing the need to use a bank or lender. In fact, seller financing has been around for decades and last year alone there were $27 billion in transactions done. 

Since there is no involvement from a bank or lender, the seller gets to collect monthly principal and interest payments and the buyer receives more flexibility than they would with a conventional mortgage. 

To learn more about seller financing, how it works, and the benefits click here

In what states is HonestDeed available?

We are currently in Texas and actively expanding to other states. Regardless of location, we would love the opportunity to speak to you more and understand your needs to see how we can help you in your buying or selling journey. Reach out to us at: support@honestdeed.com.

Will HonestDeed be involved after closing?

Yes, we are committed to keeping your seller financed investment protected after close. Our team will:

  • Collect payments and distribute them to your account

  • Run financial health check on your buyer every 90 days

  • Provide liquidity options, up to 20% of the outstanding balance

  • Take care of handling late or default payments

How does HonestDeed reduce risk for the seller?

There are several ways that HonestDeed proactively works to reduce risk for the seller.

  • Buyer goes through a vetting process during the onboarding process

  • Every 90 days we run a financial health assessment of your buyer to ensure they are still on track to meet agreement terms

  • In the rare case of default, HonestDeed sits on title with the buyer and takes action to get your home back

What happens if the buyer defaults?

HonestDeed will work with the buyer to assess the situation, explore all options for the buyer to meet agreement terms, and if necessary we will handle the eviction process. We are able to handle the eviction process since we sit on title with the buyer.

Our primary goal is to handle the default within 90-120 days. If we are not able to do so, we will move to evict the buyer. Your investment is protected and all payments and interest accrued would be addressed with proceeds of a home sale or return of the original collateral (the home) to you.

What happens if a buyer is late on a payment?

The buyer will receive multiple notifications alerting them of their late payment. If after one week, we are not able to resolve the late payment through notifications we will proactively call the buyer. In the rare instance that we are not able to get in contact with the buyer or resolve the late payment, we will start our default process. You will continue to accrue interest payments.

What are the tax ramifications of a home sale through HonestDeed?

When you seller finance the sale of your home, you get to benefit from tax advantages. For example, if you have gains outside your exemption* then you pay taxes over the course of the loan term vs at time of sale. This means you end up keeping more money and having it work longer!

Exemption:

  • The home you’re selling was your primary residence two of the last five years

  • $250,000 for individuals / $500K for married couples

What responsibilities for the property do I have post close of a sale through HonestDeed?

None! You have sold the home just like with a traditional sale and have no financial or legal responsibility for the home.

How are the down payment and monthly payments handled?

All payments are collected and distributed through HonestDeed’s platform. Buyers and sellers will link their financial accounts to our platform, and these accounts are used for payment collection and distribution

What happens when the property is sold?

When the property is sold, nothing different happens from a traditional home sale. HonestDeed collects the proceeds from the sale and distributes them to you (any outstanding principal and/or interest payments left on the loan term) and to the buyer (any of the remaining proceeds).

Do I have any exposure to taxes or insurance claims?

No, all those responsibilities are that of the owner.

What happens if HonestDeed were to cease to exist as a company?

Your payment schedule will be transferred to a servicer, who within 30 days will become the new intermediary for collecting payments and distributions.

How does HonestDeed make money?

We take a structure fee at closing that is split between the buyer and seller. We also collect a small maintenance fee from each of your monthly payments.

What does HonestDeed not do?

HonestDeed does not provide the financing.

We do not sell homes or buy homes.

We do not pay HOA fees or insurance payments.

What happens if I pass away?

Your monthly payments would be passed on to an heir. You will input beneficiaries when signing the agreement.