When working with your buyers, they may be shy of meeting all the financial requirements to purchase a home. Here are sources and strategies that may help.
First off, consider seller financing. The use of seller financing-in which the seller agrees to take a promissory note from the buyers for the purchase of the seller's home. This has dropped because fewer sellers can finance the sale of their current home and buy another. However, if buyers are creditworthy, it doesn't hurt to ask whether sellers have the means to swing a seller financed transaction.
Next, tap family members. Many loan programs allow buyers to use gifts from family members for a down payment or closing costs.
You can also turn to IRAs. Remind buyers to investigate whether borrowing from their individual Retirement Accounts can help generate cash for a down payment. IRA rules also permit you to withdrawal up to $10,000 penalty free once in a lifetime to purchase a home. However, you must be either a first-time buyer or someone who has not purchased a home in at least two years.
Keep an eye on credit unions! Credit unions are often a well kept secret, but they can be an economical source of financing. Most credit unions service their own loans and occasionally even run "specials" on loans.
And last but not least, suggest leasing with an option to buy. A lease option agreement allows buyers to rent a home with the promise of a sale at a certain price while they gather a down payment. Often, the sellers agree to apply a portion of the monthly rent toward the down payment. If a seller's home is languishing on the market, this might be a good way to secure an eventual sale and help buyer.
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