Have you ever thought about owner financing?
With the increase in interest rates, we are hearing more people talk about the possibility of owner financing. Usually you only see owner financing when the owner is an investor and they’re trying to maximize the return on the property.
BUT if you are contemplating owner financing, here are 4 things you need to take into consideration:
ONE: Always get the buyers prequalified just like a bank would. Make sure they have great credit history and they have the means to pay for the monthly payment.
TWO: Get a substantial down payment, as in 30% down, and make it non-refundable. Make sure it’s enough money that the buyer isn’t going to decide to walk away from the house or damage it. You want them to be serious about it and take care of it because you are owner financing the home.
THREE: Understand the foreclosure process in your state. It varies by state and it is important that you understand the foreclosure process so you know what would happen or need to take place should the buyer not be able to make the monthly payment.
FOUR: Make sure there isn’t an existing mortgage on the home. You cannot have a loan on the home and do owner financing. Should the bank find out that this has happened, they could call the loan due IMMEDIATELY, or you could lose your investment in the house. Be sure that you own the home free and clear.
As always, if you have any questions about this topic or buying or selling, give me a call! My team and I are on standby 7 days a week, 9am to 8pm, ready to help you take the smoother road to sold.
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