Using Owner Financing To Sell Your Properties Faster

The current real estate market is becoming more and more saturated with properties for sale and very few buyers. Cosequently, the prices of houses keep going down every month.

As a result most real estate investors find that they can no longer sell their properties as easily as they used to.
Even if you are not selling investment properties, you find that you get little to no interest when you try to sell your house.

This article looks at how to generate interest by using owner financing, and probably selling it fast or even for a higher price than you would otherwise sell it.

What is seller financing?
seller financing occurs when the seller accepts to become the bank for part or whole of the value of the 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.

Once the seller accepts to carry a mortgage on the property, the buyer usually pays a down payment. They then start getting payments from the buyer every month.

Some sellers require the buyer to make payments through an escrow company such as a lending institution in order to protect themselves. They require the buyer to put a quit claim deed with the escrow company with instructions that the escrow office may file it if the buyer defaults in making their payments.

The property ownership reverts back to the original owner if the buyer defaults in making the payments. In such a case the buyer loses the payments made on the property.   The buyer therefore has a powerful incentive to continue making payments as agreed.

When a seller finances a property, there are no points or other closing costs, so the buyer could end up saving thousands of dollars. The transaction is more open to negotiation which works as an advantage both for the buyer and seller.

Why seller financing?
In the past, just staging your property was enough to bring a quick sale. Not any more. Why would anyone buy your house when they can get a similar one for less?

A potential buyer is first attracted by the terms of the sale before they come to take a look. owner financing attracts a lot of attention for your properties.

Banks have tightened underwriting procedures, and most people ca no longer qualify for a mortgage. Most people have a credit that has been bruised.   These buyers can only own properties through seller financing.

When you are selling your houses, you end up generating a lot of interest, selling faster, or even selling at a higher price by using owner financing.

Comparable sales of similar properties are used to estimate the best price of the properties.

It is important to be careful which properties you use as comparable sales. If a property has been sold with special terms such as owner financing, it follows its price may be higher than other properties.   This price may therefore not reflect the true value of similar properties.

At the end of the day with seller financing, you will sell your house faster or 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. owner financing provides a way for them to sell their properties faster even where others cannot.

About the Author

Simon Macharia invests in real estate in Dallas Texas. He has seen a lot of creative techniques for buying and selling houses and uses an automated real estate investing website to run his business. These websites attract leads through advanced search engine optimization pre-screen and pre-negotiate with these leads and reduce the daily workload enabling him to do more deals using less time, money and effort.

Author (simon87). Submitted on Thu, 1 Sep 2011 Time: 2:40 PM

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