Pricing and Financing

Pricing of subdivision lots is dependent upon market conditions, lot location, trees, and financing. General financing of lot sales in the EC Bar Ranch Estates subdivision is discussed below:

1. Cash sale. While the closing date is negotiable, a closing in the following year might be mutually beneficial to the parties.
2. Financed sale.
   1. A mortgage company may arrange financing with a lender holding a first mortgage with the lot as collateral with proceeds covering the closing costs and lot sales price in cash.
   2. Owner financing may be available.
      1. Terms may require 20% down payment at closing with monthly principal and interest subject to negotiation.
      2. The seller would hold a first mortgage with the lot as collateral.
      3. Example: 80% of the sales price amortized over 15 years at 4% interest rate over the Prime Rate (quoted in the Wall Street Journal) adjusted periodically. If the Prime Rate is 3.25%, the rate of interest applied to the unpaid balance would be 7.25%. Historically, the interest rate on a mortgage collateralized by vacant land is higher than the rate on a 30 year fixed rate home mortgage.
      4. Buyer must give 12 months notice to avoid a prepayment penalty.
      5. A balloon payment after 5 years may be optional without prepayment penalty.
      6. The parties will enter an agreement whereby the buyer will make monthly payments to a servicing company. For example, Fidelity Title Company, Tucson, AZ, provides loan Account Servicing for a small fee. Terms are attached.
3. Trade. Subject to negotiation.
4. Amortization Schedule Calculator