The questions people ask. Answered first, explained after.

Yes, but the due-on-sale clause is the risk you have to plan around. Federal law lets your lender enforce a due-on-sale clause when you transfer the home (12 U.S.C. § 1701j-3(b)(1)). A wrap or all-inclusive trust deed is not on the federal exemption list (12 U.S.C. § 1701j-3(d)). Before you sign, decide how the full balance would get paid if the lender calls it: a buyer refinance, your reserves, or a sale. The selling with a mortgage guide and the wrap spread calculator walk through the numbers.

The full balance on your underlying loan becomes due, and someone has to pay it. Federal law lets the lender enforce the clause (12 U.S.C. § 1701j-3(b)(1)), and a wrap is not exempt (12 U.S.C. § 1701j-3(d)). The usual exits are a buyer refinance, a payoff from your reserves, or selling the home. Under the state Seller Financing Addendum, a buyer payoff triggered by the clause is credited to the note's principal (Seller Financing Addendum § 5). Plan the exit before closing, not after the letter arrives. More in what happens if the lender calls the loan.

You and the buyer can agree on any written rate, and Utah sets no usury cap. If the contract states no rate, the legal rate is 10% a year (Utah Code § 15-1-1). The practical minimum comes from federal tax law: a note below the applicable federal rate can have interest imputed (26 U.S.C. §§ 1274, 483; Rev. Proc. 2025-32). The September 2026 long-term AFR is 5.12% (Rev. Rul. 2026-17). See seller financing interest rates in Utah for how sellers set a rate.

A title company can close the sale, but it won't draft your note or advise you. The state Seller Financing Addendum itself warns that brokers aren't qualified to ensure the financing complies with the law (Seller Financing Addendum). Agents can't alter state-form boilerplate, so custom terms belong in attorney-drafted documents (Utah Admin. Code R162-2f-401b). Greg Hansen prepares the note and trust deed for a flat fee of $750, and a Utah title company closes and records them. See what the flat fee covers.

With a note and trust deed, you usually foreclose through a trustee's sale without going to court. Only a Utah attorney or a licensed Utah title company can exercise the power of sale (Utah Code § 57-1-21). On an owner-occupied home, you first send a written notice giving at least 30 days to cure (Utah Code § 57-1-24.3). After the notice of default is recorded, the buyer has three months to reinstate (Utah Code § 57-1-31). The sale comes after that, with no redemption afterward (Utah Code § 57-1-28). The foreclosure timeline tool computes the dates.

Usually not, because Utah exempts a seller who carries back a trust deed on the property sold. The exemption in the Utah licensing act has no numeric cap on transactions (Utah Code § 61-2c-105(2)(i)). Federal rules are separate: the Reg Z seller-financer exclusions keep a qualifying seller out of the loan-originator definition (12 CFR § 1026.36). Those exclusions have conditions on property count, balloons, and rates. The licensing checker walks through six questions.

The federal exclusions cover one property, or up to three properties, in any 12-month period. The one-property exclusion is for a natural person, estate, or trust, and it permits a balloon (12 CFR § 1026.36(a)(5)). The three-property exclusion covers any person but requires full amortization and a good-faith ability-to-repay check (12 CFR § 1026.36(a)(4)). Separately, more than five dwelling-secured consumer loans in a year makes you a TILA creditor (12 CFR § 1026.2). The Dodd-Frank and SAFE Act guide covers the details.

Often yes, but the federal exclusion you rely on decides it. The one-property exclusion for a natural person, estate, or trust permits a balloon (12 CFR § 1026.36(a)(5)). The three-property exclusion requires a fully amortizing loan, so no balloon (12 CFR § 1026.36(a)(4)). A balloon also needs a realistic exit, usually a buyer refinance, so leave the buyer enough years to get there. Model a 5-year or 7-year balloon in the seller-carry calculator, and read balloon payments in Utah seller financing.

You usually report the gain on the installment method as payments arrive. Each payment's gain is the payment times your gross profit percentage, and depreciation recapture is taxed in the year of sale (26 U.S.C. § 453; IRS Pub. 537). You can elect out and report the full gain on Form 8949 or Form 4797 (IRS Pub. 537 (election out on Form 8949 or Form 4797)). Buyer and seller exchange taxpayer ID numbers so interest can be reported (Seller Financing Addendum § 9). Ask your CPA how it fits your return, and see the servicing and taxes guide.

You can collect payments yourself, but a third-party servicer keeps a cleaner record. Utah's Department of Financial Institutions gives a private seller hiring a third party to receive payments as its own example of escrow-agent work (Utah Code Title 7, Chapter 22 (Independent Escrow Agents)). A casual lender making fewer than five mortgage loans a year is exempt from DFI notification (Utah Code § 70D-2-103). A servicer tracks the balance, sends year-end statements, and gives both sides one set of numbers. More in third-party note servicing.

Find a seller willing to carry the loan, then document it the way a bank would. Look for listings that mention owner financing or a seller carry, or have your agent ask. The terms go on the state Seller Financing Addendum to the REPC (Seller Financing Addendum (state-approved form, Oct. 20, 2021)). Ask for a lender's title policy, which the addendum offers as an option (Seller Financing Addendum § 8). Ask whether the seller still has a mortgage before you sign. The buyer guide covers each step.

It means the seller, not a bank, lends you part of the purchase price. You pay the seller monthly under a promissory note, usually secured by a trust deed on the home (Utah Code § 57-1-19). Owner financing and seller financing mean the same thing. The listing term doesn't tell you the structure, so ask whether it's a note and trust deed, a contract for deed, or a lease option. The which-instrument tool compares them, and the glossary defines each term.

It depends on the instrument: a trust deed gives you title, a contract for deed doesn't. With a note and trust deed, you take the deed at closing and a trust deed secures your debt (Utah Code § 57-1-19). Under a contract for deed, the seller keeps legal title until you finish paying. Either way, record your interest. An unrecorded document can lose to a later good-faith buyer who records first (Utah Code § 57-3-103).

Your protection is structure: a third-party servicer, proof of payments, and a recorded interest. The Seller Financing Addendum requires the seller to show within 10 days that underlying payments are current (Seller Financing Addendum § 4). A servicer who pays the underlying lender straight from your payment keeps a missed payment from going unnoticed. Recording the all-inclusive trust deed puts later buyers on notice (Utah Code § 57-3-102). Also know the due-on-sale risk: a wrap is not exempt, so the underlying lender can demand full payment (12 U.S.C. § 1701j-3(d)). Have a refinance plan ready.

Usually yes, but the new lender sets the waiting period and the loan-to-value limits. Seasoning rules come from lenders and loan programs, so ask a loan officer before you sign the note. Lenders typically want a clean record of on-time payments, and a servicer's statements make that easy to show. If your note has a balloon, pick a due date that leaves room to qualify. An attorney can help you build that timing into the note; see refinancing out of seller financing.

Seller financing usually protects a buyer better, because you own the home from day one. With a lease option, you're a tenant until you exercise the option, and missed rent can end the deal. Utah's state-approved forms list includes no lease-option form (Utah Admin. Code R162-2f-401f), so the documents are custom. If the seller has a mortgage, a lease with a purchase option is not on the federal due-on-sale exemption list (12 U.S.C. § 1701j-3(d)). The which-instrument tool compares the options side by side.

Pick the instrument in Section 1, then fill in the note terms carefully. Section 1 offers a Note and Deed of Trust, or a Note and All-Inclusive Deed of Trust (Seller Financing Addendum § 1). With the all-inclusive option, the seller must show within 10 days that underlying payments are current (Seller Financing Addendum § 4). You also owe a written disclosure of the due-on-sale clause and its consequences (Utah Admin. Code R162-2f-401a(6)(d)). The seller provides an amortization schedule, total interest, and APR (Seller Financing Addendum § 2.1). See how to fill out the addendum.

Fill in the state forms, and leave drafting the note and trust deed to a Utah attorney. Licensees can't alter state-form boilerplate and must use approved addenda (Utah Admin. Code R162-2f-401b). The addendum itself warns that brokers aren't qualified to ensure the financing complies with the law (Seller Financing Addendum). Where the unauthorized-practice line falls in a given deal is a question for a Utah attorney. The safe habit is to send the documents to one; see can a Utah agent draft the note and for agents.

At minimum, the underlying loan documents and the note's full payment terms. Under the addendum, the seller discloses the underlying loan documents (Seller Financing Addendum § 5) and provides an amortization schedule, total interest, and APR (Seller Financing Addendum § 2.1). A licensee must disclose any due-on-sale clause and its consequences in writing before a binding agreement (Utah Admin. Code R162-2f-401a(6)(d)). A seller below the TILA creditor threshold doesn't have to give a Loan Estimate or Closing Disclosure (12 CFR § 1026.2; CFPB TILA-RESPA fact sheet). Leaky roof you patched three years ago? Disclose that too.

Many Utah title companies close seller-financed sales, so ask before you open escrow. For a wrap, ask specifically whether they close all-inclusive trust deeds and how they handle the underlying loan. Ask who will service the payments after closing. Make sure your written due-on-sale disclosure is signed and in the file (Utah Admin. Code R162-2f-401a(6)(d)). The agent guide has a closing checklist.

Subject-to leaves the seller's loan in place, while a wrap adds a new note on top. In subject-to, you take title and make the seller's loan payments, with no new note to the seller. In a wrap, the buyer signs a larger all-inclusive note to the seller, who keeps paying the underlying loan. Neither is on the federal due-on-sale exemption list (12 U.S.C. § 1701j-3(d)), so both carry acceleration risk. Refinancing is a lender question in both cases, and it turns on credit, equity, and payment history. See subject-to vs wraparound.

The legal risk is real, because the lender can call the full balance due. Federal law lets a lender enforce a due-on-sale clause (12 U.S.C. § 1701j-3(b)(1)), and a subject-to transfer is not exempt (12 U.S.C. § 1701j-3(d)). Nobody can tell you in advance whether your lender will act, so plan as if it might. Mitigations: a written disclosure the seller signs, reserves or a refinance plan sized to the payoff, a servicer, and correct insurance. The wrap spread calculator shows what's owed if the lender accelerates.

Coverage has to match who owns and lives in the home, so talk to an insurance agent first. What typically happens is a new policy in the buyer's name that still lists the lender as mortgagee. Changing the policy can bring the transfer to the lender's attention, which is part of the due-on-sale risk. Ask an attorney and your insurance agent to review the setup before closing. The investor page covers the rest of the paperwork.

An all-inclusive trust deed secures a note whose balance includes the seller's existing loan. The state-approved All Inclusive Trust Deed form is dated October 1, 1983 (All Inclusive Trust Deed (state-approved form, Oct. 1, 1983)). No Utah statute specifically regulates AITDs (Utah Code Title 57, Chapter 1). It is recorded with the county recorder, and recording gives everyone constructive notice (Utah Code § 57-3-102). In Utah County the recording fee is $40 per document (Utah County Recorder, Recording Fees). The due-on-sale risk on the underlying loan stays (12 U.S.C. § 1701j-3(d)).

Usually you shouldn't, because FHA and VA loans are generally assumable. With the servicer's approval, a qualified buyer can take over the loan itself, which beats leaving it in the seller's name. A subject-to transfer or a wrap also keeps the due-on-sale risk alive, since neither is on the federal exemption list (12 U.S.C. § 1701j-3(d)). On a VA loan, the seller's entitlement generally stays tied up until the loan is paid off or a qualifying veteran buyer substitutes theirs. Ask the servicer about a formal assumption first, and have an attorney review the loan documents.

A seller bankruptcy can pull your deal into court, so plan for it upfront. What typically happens depends on timing and on whether your deed was recorded before the filing. Record right away, since an unrecorded document can lose to a later good-faith purchaser (Utah Code § 57-3-103). The underlying loan stays in the seller's name, so a bankruptcy can also affect that loan and add to the due-on-sale risk. This is fact-specific, so ask a Utah attorney, and a bankruptcy attorney if a filing looks likely.

Look for a Utah-licensed attorney who does this work regularly and posts a price. Ask whether they will explain the risks, including the due-on-sale clause, before you sign anything. Ask what the fee covers and what would be billed hourly. Greg Hansen is a Utah real estate attorney in Provo who prepares seller-financing documents for a flat fee of $750. The services page lists what the fee includes.

Yes, and a Utah-licensed attorney can prepare documents for property anywhere in Utah. Greg Hansen's office is in Provo, and he prepares seller-financing, wrap, and subject-to documents for property across the state. Every wrap or subject-to deal starts with the due-on-sale risk on the existing loan (12 U.S.C. § 1701j-3(d)), and the documents should address it. Utah recorders accept electronic recording statewide (Utah Code Title 17, Chapter 71). See St. George and Salt Lake County.

Greg Hansen prepares the standard seller-financing package for a flat fee of $750. That covers the promissory note, the trust deed or all-inclusive trust deed, review of the addendum and REPC terms, a closing-instruction letter, a servicer setup letter, one round of revisions, and a 30-minute planning call. Hourly work covers negotiating with the other side's attorney, requesting the underlying lender's consent, multi-property or entity deals, and litigation or default work. Lender-consent requests come up because of the due-on-sale clause on the existing loan. The first 15-minute call is free; see services.

Yes, because the documents secure Utah property and must work under Utah law. Only a Utah attorney with a Utah office or a licensed Utah title company can exercise a trust deed's power of sale (Utah Code § 57-1-21). Recorded documents have to meet Utah's format rules (Utah Code § 17-71-402). The due-on-sale risk on the underlying loan is the same wherever you live (12 U.S.C. § 1701j-3(d)). Calls and signing can happen remotely, and Utah recorders accept e-recording (Utah Code Title 17, Chapter 71).