The recent changes to the economy these past few years have homeowners discovering whole new ways to sell their home. For example, many have done away with selling through a realtor and have opted to sell properties on their own. Another option that has been growing in popularity is selling a house with owner financing.
What Is Owner Financing?
Owner financing is a kind of private mortgage where you, the owner, acts as the lender and receive the monthly loan payments of the buyer. With this home selling scheme, your listing can sell faster in a slow or poor real estate market. With the right preparation and execution, selling your home through owner financing is possible.
Steps To Owner Financing
- Determine the value of your property. Pricing your house can be tricky: you have to make sure that it is low enough to attract buyers, but high enough that you get a good income from it. You can contact a reputable real estate agent to help you decide on the best price for your home.
- Consult with a real estate lawyer and get help in creating an agreement. Remember that you are acting like a bank with seller financing. The buyer will give you the down payment of the property, and get the succeeding regular monthly payments until it gets paid off. Also, aside from protecting yourself, you have to make sure that you do not put yourself in legal troubles abide by all federal, local and state laws as well.
- Market your property both offline and online. After you have done all the paperwork, you can now advertise your listing for sale. Market it anywhere you can. This way, it reaches as much potential buyers as possible. Stage each room of your home and post pictures of them in your ad. Most importantly, do not forget to include that you offer seller financing.
- Work with your potential buyers and tour them through your house. You can also do an open house if you want. Negotiate offers and find the middle ground where both of you can agree on. Once you reach an agreement, be ready to sign the necessary papers.
- After agreeing on the price and signing the documents, you can how to collect the initial payment and hand over the keys. In most cases, you will still hold ownership of the house until the buyer has completed the monthly payments. Once this happens, ownership will then be transferred to the buyer.
Is Owner Financing A Good Idea For The Seller
Owner financing is great for homebuyers who may not currently qualify for a traditional mortgage or just want to rent for a while to see if they like the area. But does owner financing benefit the seller? Here are some things sellers like about rent to own.
- They like that they get monthly cash flow from financing payments
- They like that they still own the house and are protected, should the seller stop paying
- They like that there is no property management (the tenant-buyer is responsible for maintenance and repairs)
- They like that they have a larger group of potential buyers to sell to (including those who might not qualify for traditional bank financing)
What’s not to love? You get ongoing cash flow and protection, and you’re still able to sell your house. That’s a perfect recipe. Whether this is your primary residence that you’re looking to sell, or you’re a landlord who is ready to start selling some of your rental property, owner financing might be a great option for you.
If you find yourself still having difficulty in selling your property through owner financing, ask help from the real estate experts at Real Home Solutions. Toby Hanson and his team specialize in owner financing options and can offer you great advice or even work with you in finding a good buyer.
The buyer will put down a substantial deposit so they have ‘skin in the game’ and make payments until other financing can be arranged. And the best part is you pay zero in commission because we are not real estate agents. We’ll still close at a title company using a real estate attorney and the buyer pays the attorney fee. Call or text us at (720) 513-6037.