How To Sell Your House Faster With Owner Financing - The real estate market today is having more and more properties for sale, and fewer and fewer buyers for those properties. Cosequently, the prices of houses keep going down every month.
How To Sell Your House Faster With Owner Financing
By Simon Macharia
Aug 29, 2011 - 12:04:00 PM
The real estate market today is having more and more properties for sale, and fewer and fewer buyers for those properties. This has caused the house prices to keep going down every month.
As a result most real estate investors find that they can no longer sell their properties as easily as they used to.
Likewise, if you are looking to sell your house even if you are not a real estate investor, you find yourself stuck with properties that generate little or no interest from buyers.
In this article, we look at how seller financing can generate interest from buyers resulting to a quick sale even at a higher price.
What is seller financing?
In owner financing, the seller agrees to carry part or whole of the financing for his property. The seller may own the property free and clear, or may still have an outstanding mortgage on it.
Whatever the case, I would advise you to seek help on how to structure and close your owner financed deals. Be sure to talk toy our real estate attorney and CPA.
Once the seller accepts to carry a mortgage on the property, the buyer usually pays a down payment. They then start getting payments from the buyer every month.
In order to protect themselves, some sellers require the buyer to make their payments through an escrow company such as a bank. They require the buyer to put a quit claim deed with the escrow company with instructions that the escrow office may file it if the buyer defaults in making their payments.
This way, the property reverts back to the original owner if buyer defaults on the payments. In such a case the buyer loses the payments made on the property. The buyer therefore has a powerful incentive to continue making payments as agreed.
In owner financing, there are no points or closing costs, meaning the buyer could end up saving thousands of dollars. Since both parties are more open to negotiation, they both have an advantage.
Why seller financing?
In the past, just staging your property was enough to bring a quick sale. Not any more. Why should a buyer choose your property when there are numerous other properties in the neighborhood are selling for a lower price?
A potential buyer is first attracted by the terms of the sale before they come to take a look. seller financing attracts a lot of attention for your properties.
With the banks tightening their lending procedures, most people can no longer qualify for a conventional mortgage. Most people's credit has also been bruised. These buyers can only own properties through owner financing.
As a seller, using owner financing generated lots of interest for you resulting to quick sale or even selling at a higher price.
The best price of the property is of course estimated from recent sales of comparable properties in the area.
However, you must be careful which properties you use as comparable sales. Properties that have been sold with seller financing carry a higher price than others sold in the conventional way. Therefore, its price may not reflect the true value of similar properties.
At the end of the day with owner financing, you will sell your house faster or even at a higher price.
Ultimately, with so many properties sitting on the market, real estate investors who adapt to the changing trends are able to weather the storm and continue making profits in real estate. seller financing allows them sell their properties faster where others cannot.
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