Selling a house without slashing the price can be accomplished with seller financing, even in this rough economy. Millions of potential buyers who cannot get traditional financing are able to get the deal closed when a seller provides them with a note or seller financing. Both the seller and buyer benefit, because this can bring a deal back to life that would otherwise not be completed. In addition the seller can get closer to his asking price when the transaction is facilitated with a seller note.
Most property owners do not understand seller financing and how it works, and therefore they do not offer it to prospective buyers when they go to sell their property. By applying this very important concept, sellers can create three distinct advantages. The three advantages to seller financing are more buyers, more money, and long term profit. Let’s take a closer look at seller financing and the advantages to the seller.
When a seller offers financing on a house and advertises seller financing in the newspaper, more buyers will automatically be interested in seeing the house. Many of the buyers that have been turned down already from the bank or are unable to get bank financing will now become a new prospective buyer just by virtue of the seller carrying a note or a mortgage. The number one benefit to the seller is that there will be more buyers that will have the ability to make an offer on the house.
Properties sell for a higher asking price when the seller offers a carry back or a note to the buyer. Buyers are often aware that the only way they will be able to acquire the property is from seller financing because often times they have already been turned down by the bank. The buyer is face with buying the house at a higher price or not buying the house at all. For this reason the seller’s second advantage is more money.
Benefit #3 to the seller is LONG TERM PROFITS. By creating a note for the buyer the seller is acting as the bank and collects interest on the monthly payments from the buyer. Sometimes the payments may be interest only payments. The seller is able to collect these interest payments over time while maintaining the original loan balance until the property is refinanced and the balance is payed off. Seller financing is a win win situation fro the buyer and the seller.