Seller Financing 9 Pros and 6 Avoidable Pitfalls Buyers Need to Know :
~ 9 Pros of Seller Financing for Buyers ~
1. No bank qualification
2. Stated income / bank statement verification allowed
3. Some old debts and collections allowed
4. Past bankruptcies, foreclosures and shortsales allowed
5. Qualify and take title while in a Chapter 13 bankruptcy with Trustee approval
6. Flexible rate, terms and approval – you are not hemmed in by the traditional 30 year mortgage
7. No loan fees involved (typically 3%)
8. Build or repair credit through your new mortgage account history
9. Your monthly payment is earning YOU equity and/or tax deductions
Purchasing a home with seller financing can be a great start, or a fresh start, for many people. It offers a lot of flexibility and has become increasingly popular with the self-employed and people who have gone through a bankruptcy, shortsale or foreclosure in recent years, especially. It even works for those who are currently in a Chapter 13 bankruptcy with Trustee approval.
~ 7 Common Pitfalls Buyers Should Avoid at All Costs ~
1.Never work directly with a Seller without licensed representation 
2.Never use the Seller’s attorney to close (especially on a lease-option)
3.Never accept a property or Seller that has not been vetted through a licensed title company (tax and other liens may not show up but will affect the transfer of title to you until seller's debt is paid off)
4.Never give ‘good faith’ deposits or hand over any money directly to a seller or unlicensed person
5.Never hand over any credit information to any unlicensed person
6.Never sign anything that is not structured by a licensed Real Estate Broker who is experienced in this type of transaction
7. BEWARE OF CRAIGS LIST ADS BY UNLICENSED INDIVIDUALS - Our offices have been receiving a higher than normal volume of calls from consumers who were duped by scams from seemingly legitimate owners
Seller financing has also taken root with buyers who have high debt to income ratios due to divorce. Often these buyers don’t qualify traditionally because they are still on the ex-spouse’s mortgage even though they are not responsible for the payment. Most of these people have good credit, but do not fit conforming guidelines and therefore think their only option is renting. Most people who have been homeowners find renting very unappealing. Often pets are displaced, they are overwhelmed by rules and regulations that were never part of their day to lives before… it can be quite disconcerting.
Our highly recommended Alternative Purchase program has provided healthy options for many of our neighbors in the community for years. These people are legitimate buyers who had been marginalized from homeownership yet are excellent candidates for owner financing. Our goal is always to create a transaction in which both buyer and seller are happy with and benefit from the results.
Meg O Harrison is a licensed real estate broker who is highly experienced in owner financed transactions. Get it touch with her today to learn about options that just may be a lot better than what you thought you could do.
Intensely Focused On YOUR Real Estate Goals - From Start to Finish!
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