Wednesday
Jun062012

Seller Financing- How to Sell Houses that don't qualify for Bank Financing.

Owner financing offers a simple solution for buyers and sellers of real estate that either can't or won't go through the normal mortgage process. 

Seller or Owner financing is a way for buyers and sellers to transfer property ownership. Basically, it is when a seller gives the Deed to a new Buyer in exchange for cash and a promissory note payable over time. It is similar to a regular loan in that the normal title and escorw processes have to be followed. Also, if improved, insurance is needed to protect all parties in the event of a fire.

It is different from a regular loan in that the decision about whether to do the loan or not (i.e. underwriting) happens mostly between the buyer and the seller instead of the bank or mortgage company. 

When owner financing is used, it should still occur with the help of professionals such as a Realtor, Attorney, Appraiser, Insurance agent, Escrow and Title. 

The best part of Seller Financing however is a much higher level of CONTROL for the buyer and seller. This often reduces the time required to close a sale and most important, allows for realty that doesn't qualify to still be purchased with a new buyer! 

As a 1st Trust Deed investor, seller financed notes provide an exceptional investment opportunity. By buying existing seller financed notes at a discount from the seller, you are able to buy a high yielding 1st Trust Deed that already has a payment history! This method of investing can help you lower risk by underwriting around past performance.

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