Tara Camp | Skagit County Real Estate
Connect Realty.com, Inc
Contact Tara | Tara@ConnectRealtyHomeSales.com | 360-296-3244
Create an Account
Creating an Account allows you greater access to additional home search features. Click Login below to begin.
Click Here to Log In
Seller Financed Properties
First and foremost, buying a home with seller financing is a great way to buy or sell a property! However, asking a seller to carry the financing can be a bit tricky proposition. That's partly because if you ask the listing agent if the owner will carry some or all of the financing, the agent probably doesn't know how it works, what the benefits are, and/or how to present it to their clients. It could also be due to the fact that the agent isn't looking out for the best interest of their client. They think it's easier to go the conventional route, ensuring they get paid and it cutting back the amount of work they'll have to do.
If you ask the seller directly, the seller is likely to say no. Sellers often reject the suggestion of owner financing because nobody has explained the benefits or proposed owner financing as a way to sell the home. Most sellers don't sell a home every day. Their knowledge is limited to conventional practices where the buyer goes to the bank to get financing.
My objective as an agent is to educate my clients on all methods of selling that could be beneficial to them. Seller financing can make a huge impact on a retirement account. A seller can take $250,000 and turn it into $750,000 over 30 years at a interest rate of 6%. Not to mention that it's the most secure investment you can make. If they buyer doesn't pay, the seller can take the property back. Show me how you can do that with the stock market.
My objective as an agent is to educate my clients on all methods of selling that could be beneficial to them. Seller financing can make a huge impact on a retirement account. A seller can take $250,000 and turn it into $750,000 over 30 years at a interest rate of 6%. Not to mention that it's the most secure investment you can make. If they buyer doesn't pay, the seller can take the property back. Show me how you can do that with the stock market.
For a seller whose property has sat on the market for a long period of time or when traditional lender guidelines are tightened (like right now), owner financing suddenly becomes very popular.
Owner financing is definitely a viable option in a buyer's market.
What is Seller Financing?
When part or all of the purchase price, minus the buyer's down payment, is carried by the seller, the seller is providing owner financing. It doesn't matter if the property has an existing loan, except to the extent that the existing lender might accelerate the loan upon sale due to an alienation clause. Instead of going to the bank, the buyer gives a financing instrument to the seller as evidence of the loan and makes payments to the seller.
If the property is free and clear, meaning the seller has clear title without any loans, the seller might agree to carry all the financing. In that instance, the buyer and seller agree upon an interest rate, monthly payment amount and term of the loan, and the buyer pays the seller for the seller's equity on an installment basis.
The security instrument is generally recorded in the public records, which protects both parties.
Owner Financing Benefits to Home Buyers
Little or No Qualifying
If you're a buyer that has a less than stellar credit score, the seller's likely to be a bit more flexible than you're typical lending institution.
If you're a buyer that has a less than stellar credit score, the seller's likely to be a bit more flexible than you're typical lending institution.
Sellers and buyers can choose from a variety of payment options that are beneficial to both parties such as interest only, fixed-rate amortization, or a balloon payment. Interest rates can adjust periodically or remain at one rate for the term of the loan.
Down Payment Flexibility
Down payments are negotiable. If a seller wants a larger down payment than the buyer possesses, sometimes sellers will let a buyer make periodic lump-sum payments toward a down payment.
Lower Closing Costs
Without an institutional lender, there are no loan or discount points to pay. No origination fees, processing fees, administration fees or any of the other assorted miscellaneous fees that lenders routinely charge, which automatically saves money on buyer closing costs.
Faster Possession
Because buyers and sellers aren't waiting on a lender to process the financing, buyers can close faster and get buyer possession earlier over a conventional loan transaction.
There are Commercial, Industrial, and land listings that offers owner financing as well. Please contact me for a list of these properties.
