Homeowners in a position to offer seller financing on their home sale have a strategic, low-risk advantage that differentiates their property from their competition. This strategy is less expensive than conventional financing because points and fees are non-existent, and also offers the opportunity to receive the purchase price over a longer period of time thereby increasing profit on the sale. You can offer seller financing if: 1) you either own your property outright, or 2) your mortgage agreement does not specifically prohibit it.
The low risk aspect comes into play because the seller actually continues to own the home and make payments on their original mortgage, but receives payments from the new buyer to fund them. If this sounds like hard work, service agencies are ready to help you. They will receive the payments from the buyer and deposit them to your bank account, pay the buyer’s real estate taxes and insurance, and send out the proper tax affidavits to you and your buyer at year-end.
A knowledgeable and competent real estate broker is an essential participant in creating such partnerships between sellers and buyers and will draft the necessary paperwork to make it happen. I have successfully guided a number of seller-financed real estate transactions and have not hesitated to offer seller financing on my own properties for sale.
If you have questions about how any of this works, please give me a call and I will happily talk you through it.
Melinda Skogerson, Managing Real Estate Broker
(425) 444-4141
Next time: How to qualify buyers in a seller finance