Seller Financing was, at one time, a popular and enticing incentive for both buyers and sellers in a real estate transaction. I remember in the early 90's that is was VERY common to see it advertised. Then, the market turned and Seller Financing fell by the wayside.
In recent months there seems to be a renewal in interest in Seller Financing. What is Seller Financing? Seller Financing is when a seller of property, whether residential or commercial, provides a second mortgage for a property. An example might be a home that is on the market for $200,000. A buyer obtains a loan for $150,000 and the seller would finance the remaining $50,000. Of course, there are also situations where a seller will finance 100% if the loan.
Some advantages of seller financing are:
- Substantial saving in closing costs.
- A negotiated interest rate and repayment plan
- The borrower does not have to qualify with a lender for the seller financed portion of the loan.
- A seller could receive a higher yield on their investment by receiving their equity in the home PLUS interest
- a higher purchase price could be obtained due to the seller financing
- The home could be sold "as-is" thus avoiding repairs that might be required by a lender
Seller Financing can be a great win-win for both buyer and seller as long as ALL terms are negotiated and agreed upon during negotiations.
If you have any questions regarding seller financing please feel free to call me or email me - I will be happy to help!
Written by:
Leesa L. Finley, Broker, Realtor®
Circa Properties
919.649.6128 - direct and txt msg
All content, including text, original art, photographs and images, is the exclusive property of Circa Properties, and may not be used without the expressed written permission of Circa Properties. All information is believed to be accurate but is not warranted, Copyright 2008.
_____________________________________
________________________________________________________
_________________________________________________________
__________________________________
__________________________________
________________________________________________________
Welcome to Wake Forest NC!
Live, Love, Work and Play...
And the Surrounding Towns and Cities of Youngsville, Franklinton, Creedmoor, Raleigh, Oxford, Louisburg, Knightdale, Wendell, Garner, Cary, Apex & Holly Springs
Leesa Finley the "Wake Forest NC House Chick"
Circa Properties
919-649-6128
To Search for Homes for Sale in Wake Forest NC please visit
www.LeesaFinley.com
All content including design, code and any other material that is provided or is part of the site are copyrighted, unless stated otherwise. The copyright forbids you to reproduce or distribute any material anywhere on the Internet or offline (magazine articles, CD etc.) without a written permission and consent from me.
We are alos seeing more and more of it but most of it is from investor propertys trying to get there out go down. Its a good deal if the buyer can pay my commisions.
Laura - Yes, it is very popular with investors - especially now! If all terms can be agreed on then yes, it can be a great tool!
I am going to keep you in mind because I have an investment buyer who is interested in seller financing and I am always trying to learn more so I know better what to look for and just to become more familiar with the process as well as any red flags to look for. Thanks for sharing!
Jenn - Always happy to help! I am only a phone call or email away....
Hi Leesa,
Very timely topic. One of our property owners called just yesterday to let us know they would consider Owner Financing. The will hold a 30 yr. fixed rate at one percent below going rate with a five year balloon. Financing 80% of the selling price.
These terms yield a tremendous savings to the buyer, not only the rate of interest but closing cost are fractional as well.
Great post. Thanks for the information.
It's an interesting idea.You are right the seller financing is an option for both the buyer and seller. Thanks for sharing the information it may prove helpful in today's market.
Hal - Wow, that is a great deal that your seller is willing to consider! I am so glad that you shared that.
Brian - Thanks
Pat - You're welcome! I am seeing more and more of it lately.
Leesa, this can be a great way to go. A while back someone wrote a blog about this and I said the same thing. Everyone needs to read the small print and understand and agree to the terms.
Tanya - As with everything, the devil is in the details! Be sure to read over everything and agree to terms UP FRONT!
Hey Leesa, we are hearing a bit more about it around here but not too much yet!
Cristal - Little by little it is making a comeback - keep your eyes open!
Leeza
Everything good will happen
Tom
Tom - Thanks for coming by! Seller Financing can be a very good thing, indeed.
Great information Leesa! I like that you highlight some of the benefits of seller-financing for both the buyer and seller. Seller-Financing can be used for selling properties that are difficult to finance conventionally eg. mobile homes, businesses, single family residences with many acres, etc. A seller-financed note is also an asset that can serve as an alternative source of funding for the seller. The future payments a seller is scheduled to receive can be sold for a lump sum! Instead of seeking a loan from a bank, a lump sum provides a source of cash the seller can use for any purpose.
Paul
Good infomation post Leesa,
Yes, great for both sides..and I expect to see more of it in the investor market.
Paul - Thank you for your fantastic contribution to this post! You bring up some very valid points and highlight even more of the benefits!
Doug - Even since writing the post "seller-financing" has really been thrown around in my area!