Owner financing a house you are trying to sell during the Coronavirus pandemic can turn a stale mate into a full house (figuratively). This takes one step in selling your house out of the equation. Read about the benefits of selling your house with owner financing.
Just because you’reselling your house with owner-financing, doesn’t mean your home buyer will avoid a down payment. It is much safer to have your buyer put some money down on the house. This forces your house buyer to “invest” in their new home. A down payment of 2-10%, depending on your market and the price of the house, will cover your risk and prove the buyer is serious.
If something happens and they walk away later, you already have the money to pay for a foreclose. Simply call a real estate attorney (or title company) and have them perform the foreclosure process. You get the house back and sell it again.
Guaranteed Income for selling your house
Truthfully, there are no guarantees, but when was the last time your dividend paying stock guaranteed not to go down? Right, they didn’t.
Your home buyer will pay a predictable monthly payment every month until they pay you off. Add to that, the interest you get for the “use of your equity” until the house is paid off. Don’t think it is worth it? Find a website with an amortization schedule and enter these number;
Ex. Sale price- $100,000, interest- 6%, terms- 30 years (360 mths). See what the total interest expense. The total paid almost doubles the purchase price. That makes it worth owner financing.
A Larger Pool Of Home Buyers covid-19 won’t stop
Of all the home buyers in the market right now, did you know that only forty (40) are able to get qualified for a bank loan? That leaves a lot of buyers that are not making offers on your house.
Surprisingly, there are a lot of home buyers that can afford a nice house, but they don’t have the right income to qualify for a bank loan. Attorney, Contractors and other professional that own their own business make good money but banks won’t qualify them. These people can (and willing to ) put down large down payments if the house seller is willing to finance the sale of the house.
Now you have both parties wanting your house. This is where you make up for covid-19 stopping a lot of your buyerswith bank loans.
Get Your Asking Price
If you have sold a car before (or anything for cash), you are familiar with negotiating the price. How hard do you negotiate when the seller is financing your purchase? Have you paid more because it came with financing? Your car, your washer, the TV all cost more when they came with “an easy payment plan”. You can get your asking price when you offer financing too.
Because your adding value to the house by offering something else they don’t have to go the bank for, many people are willing to pay full price.
A Fast Sale
Rent to own or an outright financed sale can be completed faster too. Banks go thru a lot of rules and regulations that slow the transaction down. You can verify your buyers income and have them produce a credit score in less time and have your house sold before any bank could.
Freedom From Expenses
Most landlords are already familiar with selling a house with owner financing because they are used to receiving rent payments. The landlord, however, must pay the mortgage, taxes, repairs and other expenses out of that money. An owner financed house has a lender not a landlord.
When did your lender ever come out and fix your faucet? Owner financing the sale of your house allows you to pocket around the same money without doing the work of a landlord.