Owner financing is foreign to most sellers. Not helping the matters, real estate agents do not always ask the sellers if they would like to pursue it or encourage it.
Seller Knowledge of Owner Financing
Most of us are not selling our homes very frequently and our financing knowledge is usually limited to conventional bank financing.
It is nerve racking to sell a home. It is easier for most to stick to something they know and are comfortable with. However, if given the proper knowledge, a seller can feel more confident with Owner Financing and this can benefit them and the buyer.
If your house is not selling as fast as you would like, Owner Financing is a very beneficial and practical solution.
What is Owner Financing exactly?
The buyer will obtain and give the seller a financing instrument. This financing instrument is recorded in public record. This protects the seller and the buyer.
The buyer and the seller decide on down payment, monthly payment, interest rate and life of the loan. The buyer then makes payments to the seller instead of a banking institution.
Types of Owner Financing are:
- Mortgages and Promissory Notes
- Lease Purchase Agreements
- Land Contracts
As a seller or buyer, why pursue it?
Here is a list of some reasons for Sellers:
- Higher Interest Rate
- Tax Breaks
- Higher Sales Price
- Shorter Listing Term
Here is a list for Buyers:
- Flexible Down Payment
- Lower Closing Costs
- Flexible Financing
- Quicker Possession
- Less to No Qualifying
Protect yourself and your investment.
Remain open minded and be an informed Buyer and Seller. Do your homework on either or both ends so you are armed with a wealth of knowledge on the subject. As always, utilize a real estate lawyer to protect yourself.