Why would a seller allow a buyer to make payments over time for the purchase of property? Wouldn't the seller rather get paid now and require the buyer to obtain a bank loan? Here are 5 reasons property owners offer seller financing: 1. Reduced Marketing Times What is the first thing a real estate agent does when property is not moving and has been on the market for 60 to 90 days? They reduce the price and add the tagline “price reduced” to all advertising and signs. Rather than reduce the price, it might be beneficial for the seller to offer financing. Buyers provided with financing can … [Read more...] about 5 Reasons Owners Offer Seller Financing
Seller Financing Tips
Avoid Three Seller Financing Mistakes
Would you rather have $97,000 to sell your $100,000 note or only $80,000? The difference in usually comes down to the big three. Here’s the three biggest mistakes note sellers make and how to avoid flushing money down the drain. Mistake #1 – Failing to Check Credit The payer’s credit report lets you know how timely they have paid bills in the past. This is a good indicator of how they will pay on a seller-financed note. It also has a huge impact on how much an investor is willing to offer, should the seller ever decide to sell the note payments. Sadly, many sellers never check credit when … [Read more...] about Avoid Three Seller Financing Mistakes
Seller Financing – How Much Can The Buyer Afford?
Many sellers accept owner financing without any idea of how much the buyer can actually afford to pay. The last thing a seller wants is to stress over receiving monthly payments or worse, getting the property back through foreclosure. 3 Ways to Calculate Payment Affordability Before Accepting Seller Financing The amount a buyer can afford to spend on a house depends on their income, overall debt, cash they can put down, credit rating, and the mortgage terms. There are three different calculations that are traditionally used by mortgage companies to determine how much house a buyer can … [Read more...] about Seller Financing – How Much Can The Buyer Afford?
Seller Financed Notes and Interest Rates
The interest rate a seller agrees to accept when providing owner financing to the buyer has a large impact on the note’s value. Unfortunately, many sellers overlook this important decision. Why Private Mortgage Note Interest Rates Matter Inflation Fighter Each year it seems the cost to buy the basics just keeps going up. It’s not your imagination; it’s inflation. In fact in July 2008 that inflation rate was 5.6 percent higher than in July 2007 (based on the Consumer Price Index reported by the U.S. Department of Labor on August 14, 2008). Worse yet, some basic items like energy increased … [Read more...] about Seller Financed Notes and Interest Rates
What is Seller Financing?
When a seller allows a buyer to make payments over time for the purchase of property, it is known as owner financing or seller financing. This private financing by the seller can take the place of a bank loan or be in addition to a conventional mortgage. The payment amount, interest rate, and other terms are agreed upon between the buyer and seller. The amount financed by the seller will depend upon the buyer’s down payment and whether there are any bank loans. Here’s an example of how seller financing works... A property owner advertises his or her house for sale, either on her own or … [Read more...] about What is Seller Financing?