Home sellers constantly ask me how to get more buyers interested in their homes. In some cases, offering seller financing is one of the best ways to do this.
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If you're in a position to do so (and many people aren't), you may want to consider seller financing. If you have a mortgage, you probably have a due on sale clause, and this may not work, but if you own your home outright and you don't have any other pressing investments that may need this cash from the home sale, you may want to consider holding the mortgage for a qualified buyer. I can't stress "qualified" enough. You also want someone who puts enough money down, has worthy credit, and a good story.
What do I mean by a good story? Certainly not a good excuse. What I mean is why they would need or prefer owner financing. You can certainly compete with the banks to give a good interest rate and net a much higher return on your money.
Many buyers are migrating from up north; they may have a house that has not sold yet, they may not have employment in Florida long enough to qualify for a loan, or are going through a divorce, for example. There are many valid reasons why a buyer may need or benefit from seller financing.
Seller financing could potentially net you a higher return than any bank.
It could be anywhere from a year to seven years. It can happen in many ways, like a note being due at the end of a period of time. This could be a "balloon" payment, or it could be amortized. It's all negotiable. The more money they put down, the lower your risk is. You'll get a much higher return than you would by putting the money in the bank.
Sellers may wonder, "What if I have to foreclose?" Well, that's the worst case scenario. We will do everything we can to avoid that. If the buyer puts enough money down, they'll also make sure they won't foreclose. However, if you did have to foreclose and you took 30% to 50% down and you get to sell the property again, that could be the best scenario.
Remember, there are a lot of options, and I love being creative with them. If you have any questions about seller financing and how it can open your home up to a larger pool of buyers, let's talk soon!
