Your opinions on purchasing an expensive farm...

Hmmm...

He wants $600,000. Why not lower the price to what the place is worth, then he carries the mortgage. He could easily get his total amount if you include the interest. I don't want to go ammortize the thing out, but we all know interest is MOST of a mortgage payment.

We bought our farm from the owner. He did not want us to get a mortgage because he didn't want to face the tax consequences of selling the place all at once. It is set up where we pay on the contract for at LEAST five years, but no more than ten.

We cannot pay more than 1/5 of the value of the property in any of the first five years, plus interest. After five years, we can get an outside mortgage if we prefer, or continue to pay him until the ten years are up. At that point, the balance is due so we either pay up...or get another mortgage.

This helps him to spread out the gain from the property and it has helped us because he also agreed to take a minimum of $20,000 a year for the first five years. That is less than what the mortgage payment would be with the interest. It works for us and everyone is happy with the whole thing.

It was not that complicated, until the lawyers started up! In the end, we took what our lawyers had made, sat down at a coffee shop and lined stuff out and signed the stupid thing.

This way, if you ever do want to sell....your purchase price will be reasonable. The only drawback would be that you would have a mortgage that won't allow you to pay it off early. That is something to think about carefully....

Jena