Sellers make more money on the sale of their home than thru a “normal” sale. The home can sell for more than market because there is no appraisal. No bank to say “no”, because the seller makes that decisions without any third party input. The seller, if they decide to keep the mortgage note in their portfolio, will make money monthly after the sale, for a very nice return. Where else can they earn such a good return on the proceeds of the sale of their home? If they don’t wish to continue as the bank, they can sell all or part of their note or notes and realize cash immediately.
Buyers benefit from sellers financing the sale of their home because they don’t have to qualify quite so stringently. If they have had a bankruptcy, short sale or foreclosure, they can buy right away and realize the benefits of owning their own home – tax benefits, security of not having to move, or if they have a family, children won’t need to readjust their lives every year or so, as they probably would if the family were renting. There is no requirement for mortgage insurance, thereby offsetting the higher interest rate charged. Self employed buyers can more easily purchase a home because a seller can look at the buyers income with a more “common sense” approach to qualifying.
Communities benefit because freeing up the hard to sell homes to owner financing brings a faster, higher sale price, and less blight (homes sitting vacant and neglected). Thereby protecting the communities’ values.
Agents benefit thru less money spent on marketing – owner financed homes generally sell quickly. Properties with “issues” will sell despite the perceived problems. And, homes that might not have sold, will sell, thereby generating added income for the brokerage and the agents.
Title companies benefit because there are fewer escrows that fail to close because of lender problems – last minute denials, low appraisals, other complications.
Seller financed homes, as a rule, are less expensive to close because there are fewer lender fees, and there is no third party involvement to delay the closing or require repairs. So, the buyer, seller, agents and title company know exactly what to expect.
If you’re curious how you can benefit from owner financing, give me a call and I’d be glad to discuss your circumstance.