seller-financing-000001In many situations when it comes to home sales, a seller who is eager to move their home on the market may think about the option of offering seller financing. In most cases, it is better to get all of the money in one sweep motion, requiring the buyers to get financing from traditional sources. But sometimes for the seller, it is more lucrative to find creative ways on their own to offer financing. One of the reasons why this can happen is that if the market is shifting towards the favor of the buyer, the parties involved will begin to want to see the property move quickly. Once the price reduction has been pushed, different avenues of financing may be talked about.

seller-financing-00000000002One of the reasons that seller financing has become so popular is that at least around 40% of the United States population is not eligible for traditional financing. Even though many of these potential buyers don’t qualify, they could still cover the payments of a loan that was offered up to them from the seller. The property in question does not have to be distressed or completely unmarketable toย warrant seller financing: in some cities, the job market is not as healthy as it is needed to be to bring about faster closings, or qualified buyers. If the seller is offering financing, the closing period may be shortened, and there may be significantly less paperwork involved.

seller-financing-0000002What it boils down to in today’s climate is that banks offer loans so they can make a profit. The interest charged along with other fees is what begins to rack up a positive profit for the lender, in any form they may appear. On a 25-30 year loan, there is quite a hefty profit to be made, even at something like a 7% annum. Waiting to get that profit may take some time, but if you measure it up to what a savings account can offer, it is comparable. If you are offering seller financing, one very important thing to realize is that if the buyer defaults, you can always recover your property, but with a mutual fund or other investment, could stand to have it wiped out.

seller-financing-000003When you have a great property in a good location, everything else looks right, and all of the numbers should be there, sometimes properties simply don’t sell as fast as you would want them to. Make sure that you check the credit of those who potentially want to buy, because you don’t want a mortgage company to have to handle the predicaments within the legal realm that can take place. Background and credit checks are good tools that make sure a buyer is not hiding any negative elements about their credit. Before the actual transaction takes place, you need to consult with an attorney: after getting advice in this manner, don’t back down if you tend to feel sorry for the buyer, or think that they will not have the means to come through: there are many prime candidates who would enjoy a shot at seller financing for a home.

seller-financing-000004When you set out to offer a certain interest rate, it is the main bonding factor that you can use to assure you are safe. Pay close attention when you are offering seller financing to the pitfalls that can occur from negotiating on interest rates, because as many would say in other avenues of business: you can always back out if you really feel it’s necessary. Whatever is happening in your local market, the options for seller financing may seem like great ones: make sure you consult a very competent real estate attorney and Realtor to find out just where you stand.

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