Are you thinking about selling your house on your own? Make sure to read this blog post for 6 owner financing tips for sellers just like you…
Are you thinking about selling your house?
Here are 6 Owner Financing Tips For Sellers
There are different ways to sell your house. You can try to list it on the market to see how much you can get for the house, you can also try to sell it to a real estate home buying company like Candid Property Solutions and get an all cash offer for your house, or you can do owner financing and “be the bank” to sell your property to a home buyer where you will collect payment over time.
Owner financing can be beneficial but it is often an under-estimated home selling strategy. This is where you can offer terms to the buyer and they will have to make regular payments to you – just like a regular mortgage. Here are 6 Owner Financing Tips For Sellers
#1: Don’t Focus Only On Price
Price is just one thing. We understand that every homeowner would want to find a price that is fair. There are considerations that could benefit you more than the asking price.
Set a timeline that you would want to be paid. Financial companies might offer 5, 10, 15, 20, and up to 25-year mortgages. Would you want to accept payments over that period of time? Your buyer will surely ask for a timeline that would work for themselves, too. There’s a chance that they might not want to be paying you 25 long years.
The most overlooked part of the deal is the terms. This is actually the most important. The terms might include important things like the amount of the down payment if there is an early repayment penalty or a late payment penalty, and of course – the interest you charge.
#4: Protect Yourself
things could still go wrong even if you enter into an agreement with someone you completely trust. Things could still go wrong so you have to make sure to protect yourself. Make sure you and the other party have insurance for any situations that might occur. Include a clause that retains ownership of the house in your name until the time that it is fully paid.
#5: Build Contingencies
Owner financing agreement will mostly be built around your “ideal plan” – what would happen if everything goes perfectly. But you have to expect that things could happen and it is out of your control. Building contingencies will allow you to make better decisions if anything unexpected happens. What if the buyer changes his mind and no longer wants the house? What if they can no longer pay, or wants to pay early, or wants to use the house in a complete way than what you talked about? Or what if you no longer want to sell the house or you need to sell them even faster? Agree to the contingencies with your buyer ahead of time and the arrangement will be so much smoother.
#6: Get An Attorney
Make sure you work with an attorney who can help you, no matter how you ultimately structure your owner financing deal. A poorly worded agreement could end up hurting you!