Pink House Team
Keller Williams Realty
806-340-7630
OWNER FINANCING AND SELLERS
Is owner financing something that sellers should consider? There are many advantages to owner financing also called seller financing. Let's talk about a few.
I am not an accountant but if you talk to yours you may find that selling your house and receiving a big lump sum of money may have a bigger tax liability than if you financed and took the money over a period of time. Your banker may say that they can take the money and put it into a CD and pay you peanuts. It is safe but not working for you. Your financial adviser may say put it in a money market and stocks. We have all seen how that can work out. Owner financing may be the answer you are looking for.
In a seller financing transaction, you the seller are acting as a bank. A buyer comes in and gives you a down payment and you receive monthly payments of principal and interest. The interest rate is higher for you because there is some risk. Some sellers receive up to 10%-12% in interest. Doing the math on that can be big bucks.
This is NOT a rent-to-own or lease-option. In Texas there is great liability for a seller to sell that way. I will say that most buyers don't know what a seller is supposed to do and as a result lots of sellers do it. My luck would be that I get a savvy buyer and I end up losing the house. Don't do that.
In true owner financing the buyer gets the deed at closing and owns the house. You get a note and deed of trust and are now the bank. The paperwork is done through a title company and their attorney. I use Lawyer's Title and they have a lot of experience doing owner finance transactions
Everyone always wants to know the down-side so here it is. You may have to foreclose. That is not as scary as it sounds. A real estate attorney can do it. I recently foreclosed on one of my properties and it cost about $1000. Then I got the house back and resold it! The great thing is YOU always get the house back to resell.
Owner financing is not for everyone. It is a business and you have to treat it that way. For me, it is a great way to receive passive income. Contact me and I will give you more details so you can decide if it is something you want to explore.
Pamela Madore
Pink House Team
Keller Williams Realty
7304 SW 34th
Amarillo, TX 79121
806-290-1920
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