What You Can Do To Sell Your Property
Lending today (as of 6/2007) is different from what you have come to expect in the past — tighter guidelines, more stringent qualifying requirements and programs no longer offered (courtesy of the sub prime lender meltdown of 2007) have left a lot of "would be" home Buyers on the sidelines.
There is an opportunity for some homeowners to transform these "could be" home Buyers to "would be" homeowners, while maintaining your asking price and increasing the market interest in your property — It's called seller financing.
What Is Seller Financing?
Seller financing (also known as owner financing or owner carry back or "carrying paper") is simply a willingness on the part of a home seller to offer private financing for all or a part of the required loan amount.
Why Does Seller Financing Work?
Here are just some of the benefits to offering seller financing:
1.) To assist home buyers in purchasing your home (when they may not otherwise be able to secure financing through conventional means).
2.) To avail a new monthly income to the home seller.
3.) To allow the home seller to hold or increase the sales price of their property.
4.) To allow the home seller to sell their property faster.
5.) To attract more interest to the sale of your property.
6.) To allow for additional tax benefits for the home seller.
What Do I Need To Consider if I Want To Offer Seller Financing?
Offering seller financing is not without its risk — here are just some of the issues you'll need to consider:
1.) Although the loan is secured by the real estate being sold, home sellers in the 2nd lien position are exposed to higher risk then those in the 1st lien position.
2.) If the homebuyer will make timely monthly payments.
3.) The particular foreclosure rules / restrictions in the state the property is being sold.
4.) The subject to agreement (in case the home buyer sells the property, a subject to clause would ensure that the home seller would be paid off).
For those home sellers that are not interested in the exposure to risk can always sell the note after it is originated (and as a result, transfer the risk onto someone else and get paid off).
ANOTHER ALTERNATIVE TO SELLER FINANCING: Determine if your current mortgage is assumable (an assumable mortgage is one that allows a home buyer to assume the home seller's current mortgage).