Real estate market have evolved to meet everybody’s need especially now, where economic recession is greatly felt through out the globe. Now, one of the latest trends that gained popularity is seller financing. This transaction is not for everybody, but can be a great deal for a seller and buyer of a real estate property.
Seller financing is a system of renting a property to a lessee who intends to buy the house after some time. This process usually lasts for a period of three to five years depending on the agreement of the interested parties. Seller financing is an easier and faster way of closing a real estate transaction and involves a lot of benefits for both the seller and the lessee.
The lessee, who needs or wants a house but due to several issues, is actually entitled to a number of benefits in seller financing. First is being able to acquire a house even if your credit issue isn’t good. Housing loans that were denied by most of the banks were due to credit issues of the applicant. Though the seller might check your credit issues, you will still have a great deal if you can have a good negotiation with the other party. Next advantage is being saved from paying the lender fee, loan fee, etc that is normally involved in a traditional transaction. Hence, you are able to close a deal quickly and still able to save some money. Lastly, seller financing enables the lessee to have more and better options in the contract. Hence, before signing the contract make sure to check every single paragraph and handle a proficient discussion with the other party.
The seller also holds several benefits from seller financing. First is being able to have a faster transaction with a buyer. This would entail the seller to gain benefits from the substantial profit and would be free from paying the taxes related to the property. Next is a regular monthly income that you can get from the rental fee. And since the lessee is interested in owning the house, you are assured that they will take care of the house. Lastly, is when the lessee decides not to purchase the house, or is unable to meet the date of purchase as specified in the contract, the option money together paid by the lessee can be kept by the owner.
Seller financing provides a good deal for both the seller and the lessee, but before you venture into this method of real estate business, be sure to know all the possible pros and cons for you to avoid the occurrence of unwanted events.
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