One of the first things home buyers do when they start their search is to get online and look for their dream home in the neighborhoods they want to live in. There is no shortage of websites that cater to the home shopper.
The second thing home buyers do is to start looking for financing at traditional lending institutions. Many will find that the current lending climate is too restrictive.
“The National Association of Realtors, NAR, estimates that two-thirds of applicants are turned down for one or more reasons.”1
“The main reasons borrowers get turned down are:
The borrower’s credit score is too low
The borrower has too much debt
The borrower is asking for too much money relative to income
The borrower lacks a down payment”2
In most cases, the would-be borrowers who are turned down for traditional financing simply give up and go rent a home. Others look for alternatives that will put them in a home.
If you are a home seller and want to broaden your potential buyer pool, you might want to offer seller financing for your property to target these types of buyers.
There are some risk factors that must be considered in these types of transactions; however, the rewards could outweigh the risks. Sellers offering owner financing should get expert advice from a trusted source that can provide them with the pros and cons of owner financing.
Sellers offering financing will likely see an increase in the number of interested buyers and possibly even multiple offers.
Once your home is sold and the note is created, you will have yet another decision to make. You can keep the note, service it long term and collect the payments or, if it makes more sense, sell the note to an investor like NoteCom. If you decide to keep the note you should consider having it serviced by a professional servicer like ILS .
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If you currently own a real estate note and are in need of immediate cash, we would like an opportunity to bid on and possibly BUY YOUR NOTE! With over 20 years experience in the private note industry, our experienced staff is available to provide you with a quick quote and help make it easy for you to get the most for your note. Visit us today at www.notebuyingusa.com or contact us at 1-877-399-1211. If you are considering offering owner financing when you sell your property, please click here to receive your free copy of “10 Critical Steps to Creating a Sellable Note”.
This information is intended to be used as a general guide. It is not intended to constitute legal advice and is not a substitute for the advice of an attorney. While every effort has been taken to present the information accurately, this document may not be infallible. No warranty is made that these materials are current, complete, accurate, or suitable for any particular purpose. You should seek advice from your attorney before proceeding with any real estate transaction.
Source(s):
1. National Association of Realtors, NA, December 2010, Wikipedia, http://en.wikipedia.org/wiki/National_Association_of_Realtors, Date Retrieved 08/06/12 2. Mortgage Rejection and How to Avoid It, Brandon Cornett, 2012, Home Buying Institute, http://www.homebuyinginstitute.com/mortgageprocess_article28.php retrieved 08/06/12
