Using Seller Financing to Sell Your Home

The term that is used for individual sellers is called Seller financing. This happens when the seller of the property agrees to receive monthly payments from the buyer rather than having the buyer taking out a loan from a lending company.

However, some sellers may prefer to receive a steady income for their property rather than outright funds.

For example, if sell your property for $65,000, and the buyer has $8,000 for a down payment. This would mean that the buyer will have to get a loan to pay the rest, but you can choose a different option to getting the money that you want for your home.

 When the seller chooses this financing option, the seller will “hold” the mortgage and receive monthly payments from the buyer in lieu of full amount that would be provided by the loan. The repayment terms (interest rate, term or length of repayment) are then going to be negotiated between the buyer and seller. These terms would require the buyer to make a certain number of monthly payments to the seller.

Selling a property for full list price to a bank-qualified buyer is every seller’s dream but this rarely is possible. But sometimes you simply can’t sell your home under those types of conditions. Some of the most common reasons for seller financing being the selling point of your home are:

• The property may not qualify for traditional financing which is particularly often when the land that the home is on is also for sale.  Many homes also will require too much or heavy upgrading, or do not meet bank loan size requirements are a few reasons why seller financing is a must.

• Seller financing may give the seller more interest in an otherwise empty market.  Not to mention that banks traditionally are very reluctant to lend money to anyone who is buying a home from an individual seller. Many banks prefer to have dealings with realtors etc. and not For Sale By Owner’s

• The real estate market in your area could be dry no matter what the buyers think of your home. If you home has been on the market form months on end, chances are the buying market just isn’t that high. This is every seller’s nightmare, but it is a reality in many real estate markets today under the type of economy that we are living in.

As a seller, seeking seller financing will help you to get the opportunity to utilize the flexibility of seller financing and put money in your pocket at closing. What could be better than walking away with a sold home, money in your pocket and a steady monthly income for years to come?  It is just good sense for those sellers who are in need of regular cash flow and it can get you more money for your home in the end.