Seller Financing in South Jamaica, Queens: Frame and Brick Houses

Today's bank rate vs. a typical seller-finance rate

When a South Jamaica owner sells with financing, the owner becomes the lender. Most owners price that loan off what banks charge: homeowners typically ask about 2 percentage points more than the national average 30-year rate, with a 5-year balloon payment, or an extension if both sides agree to one in the contract. The numbers below update every week.

About South Jamaica

South Jamaica stretches south from Liberty Avenue and the Long Island Rail Road tracks toward Baisley Pond Park and Rockaway Boulevard, with Guy R. Brewer Boulevard and Sutphin Boulevard as its main north-south roads and Merrick Boulevard along its eastern side. The nearest subway stops are the E, J and Z at Jamaica Center and Sutphin Boulevard–Archer Avenue, and buses run down the boulevards. York College sits at the neighborhood's northern edge, and Baisley Pond Park, with its pond, ball fields and walking paths, anchors the south.

This is mostly a neighborhood of houses rather than apartment buildings. Detached frame homes from the early 20th century share blocks with brick semi-detached two-families, and many blocks gained newer two-family houses on former vacant lots from the 1990s onward. Larger complexes are the exception, though the South Jamaica Houses and the Rochdale Village co-op, built on the grounds of the old Jamaica Race Course, are major local landmarks. Because so much of the stock is one- and two-family real property, seller financing fits here more naturally than in co-op-heavy neighborhoods.

Getting around: E, J and Z at Jamaica Center–Parsons/Archer and Sutphin Blvd–Archer Ave; LIRR at Jamaica Station; buses on Guy R. Brewer, Sutphin and Merrick Boulevards

What you will find for sale

• Detached wood-frame one- and two-family houses from about 1900 to 1940, many with porches, small front yards and driveways on narrow lots.
• Brick semi-detached and attached two-family homes from the mid-20th century, typically with an owner's unit, a rental unit and a full basement.
• Newer frame or brick two-families built on infill lots from the 1990s on, often with a ground-floor unit, a duplex above and a front parking pad.
• A few small mixed-use buildings on Guy R. Brewer Boulevard, Sutphin Boulevard and Merrick Boulevard with a store and one or two apartments.

Why seller financing fits South Jamaica

In South Jamaica, the houses themselves are often what stops a bank. Many have had years of patchwork repairs, roofs near the end of their life, basement water damage from the area's high groundwater, or work done without permits, and appraisers either flag the problems or value the house low. Some still carry tangled title from the foreclosure wave that hit southeast Queens after 2008. Buyers here often have real income from self-employment or more than one job but credit that took a hit in past years, and a lender's automated system may say no before anyone looks at the full picture.

Many South Jamaica owners bought decades ago and owe nothing on the house. When they decide to sell, they are flooded with mailers and calls from cash buyers offering well under value. Carrying a note lets an owner sell at a fair price to someone who will live in the house, collect monthly income, and keep a recorded lien on the property until it is paid. Heirs who inherit a house needing work often find owner financing simpler than spending money to make it bank-ready. Spreading the gain across several years can help at tax time as well.

The 5 terms you will negotiate

Every owner-financed deal comes down to five numbers. Here is what each one means, what is typical in New York City right now, and how they work on an illustrative 2-family brick house on an infill lot in South Jamaica.

How to buy owner-to-owner in South Jamaica

1. Find owners open to financing. Start with South Jamaica properties on the SellerFinanceNYC live map, where every listing is checked against ACRIS deed and mortgage records. Owners who have held a building for decades with no open mortgage are the most likely to carry a note.
2. Offer on all five terms at once. Price, down payment, rate, amortization and balloon trade off against each other. Put them in a short written term sheet so nothing gets lost.
3. Hire a New York real estate attorney. Your attorney drafts or reviews the contract of sale, the promissory note and the mortgage, and confirms the seller has no existing loan with a due-on-sale clause. See our guide to finding an attorney.
4. Do local due diligence. In South Jamaica, check:
   • Southeast Queens has a high water table and many basements take on groundwater; ask about sump pumps and past flooding, and whether the city's ongoing sewer and drainage upgrades have reached the block.
   • Some blocks lie under JFK Airport approach paths; visit during busy arrival periods and factor aircraft noise into the price.
   • Have your attorney search for unpaid water and sewer charges, tax liens, open mortgages and OATH judgments, since some of these can attach to the property and pass to a buyer.
   • Newer two-families from the 1990s and 2000s should have a certificate of occupancy; compare it with how the house is actually used, including the basement.
   • Vacant or foreclosed houses on a block can affect values and insurance; check whether neighboring homes are in foreclosure or on the city's tax lien sale list.
5. Close like a normal sale. The deed transfers to you, you sign the note, and the seller's mortgage is recorded with the City Register. Buy title insurance, and consider a loan servicing company to collect payments and escrow taxes and insurance.
6. Plan the balloon from day one. Use the five years to build a payment record, fix up the building and document income so you can refinance well before the balloon is due.

Questions buyers ask about South Jamaica