In today’s real estate market, we are seeing more and more properties for sale flooding the market, but fewer and fewer buyers for these properties. The result is that the house prices keep going down every month.
Real estate investors therefore find it harder and harder to sell their properties like they use 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 seller financing, the seller agrees to carry part or whole of the financing for his property. The seller probably has no mortgage, or probably owes a mortgage on it.
In either case, you may need advice on how to structure the deal and close it properly. Make sure you talk to your CPA and real estate attorney.
When the seller accepts to owner finance the property, the buyer pays a down payment. The seller then receives monthly payments just like a bank.
Why seller financing?
The days when just staging your property was enough to sell it are long gone. Why should a buyer choose your property when there are numerous other properties in the neighborhood are selling for a lower price?
Before a buyer ever comes to see your house, they will have to be attracted to it by the terms you have set for the sale. 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. Lots of people have also ended up with bruised credit. These buyers can only own properties through owner financing.
As a seller, this makes owner financing a great way to generate a lot of interest and possibly even end up selling it at a higher price.
The best price is estimated from comparable sales in the area.
It is important to 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.
With seller financing, you end up selling your house faster, even at a higher price.
In a market with so many properties for sale and few buyers, real estate investors that adapt to changing trends are the ones that continue to make profits. seller financing allows them sell their properties faster where others cannot.