Seller Financing was, at one time, a popular and enticing incentive for both buyers and sellers in a real estate transaction. I remember in the early 90's that is was VERY common to see it advertised. Then, the market turned and Seller Financing fell by the wayside.
In recent months there seems to be a renewal in interest in Seller Financing. What is Seller Financing? Seller Financing is when a seller of property, whether residential or commercial, provides a second mortgage for a property. An example might be a home that is on the market for $200,000. A buyer obtains a loan for $150,000 and the seller would finance the remaining $50,000. Of course, there are also situations where a seller will finance 100% if the loan.
Some advantages of seller financing are:
- Substantial saving in closing costs.
- A negotiated interest rate and repayment plan
- The borrower does not have to qualify with a lender for the seller financed portion of the loan.
- A seller could receive a higher yield on their investment by receiving their equity in the home PLUS interest
- a higher purchase price could be obtained due to the seller financing
- The home could be sold "as-is" thus avoiding repairs that might be required by a lender
Seller Financing can be a great win-win for both buyer and seller as long as ALL terms are negotiated and agreed upon during negotiations.
If you have any questions regarding seller financing please feel free to call me or email me - I will be happy to help!
Written by:
Leesa L. Finley, Broker, Realtor®
Circa Properties
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We are alos seeing more and more of it but most of it is from investor propertys trying to get there out go down. Its a good deal if the buyer can pay my commisions.