Last week one of the sales representatives from a local title company stopped by my office. His company is offering seller financing services whereby the title company insures the seller and his or her loan position, manages the payment services, escrows for taxes and insurance, and assists with the loan documents.
I thought this was a clever idea because not every seller knows how to service a seller carry loan. With the help of the title company, the seller can be assured that he or she will receive loan payments, know the taxes and insurance are being paid, and also feel secure that all the paperwork was handled correctly.
I did not ask about the fee for this service, I guess because I don't have a buyer or seller in a position to use the service currently, but if I do, I am going to strongly suggest they explore this option.
This service would be helpful for sellers who own their properties outright and have a buyer who can't qualify for a loan perhaps because the property is commercial or because it doesn't "conform" to Fannie and Freddie guidelines. It would also be great for sellers with low loan to value loans who can have the first loan taken out by the buyer obtaining a new loan and the seller can carry a second lien.
With the myriad of difficulties we face every day trying to close a property, new and creative solutions, such as seller financing servicing, may prove to be helpful when the circumstances are right.
If you are a customer or a real estate professional and think this service would be helpful, I would suggest checking with your local title companies to see if they already have the service, or whether they could create it for you.
Photo courtesy of: http://www.shohomes.com/images/financing.jpg
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