Are you considering selling your home with owner financing? Generally when you are offering owner financing as a means of purchase for your home, you can commend top dollar and a great interest rate. Here are six techniques you can use to lower your risk.
1. Collect a large cash down payment of at least 10%.
2. Ask for additional collateral. If the buyer does not have the required down payment and you feel comfortable with the transaction, proceed as planned be require additional security in place of the down payment such as a car title.
3. Check their credit. There are many options for obtaining a credit report. Have the buyer obtain a credit report with a credit score and bring it with them when applying for the loan. Bed credit is okay, as long as the issues have been resolved and they have recovered financially.
4. Trust yourself. If something doesn’t feel right about the transaction, it likely isn’t right. You are entering into a long term relationship that shouldn’t be taken likely. You need to be 100% comfortable with the deal before you move forward.
5. Analyze the situation. Let’s say the buyer presents you with an offer. The bank has agreed to loan him 90% of the homes appraised value. The catch is the buyer only has 5% in cash. Are you going to let 95% of the homes value just walk away? Why not take a second mortgage back for the remaining 5% down to be paid over 5 years. Worst case scenario, you end up foreclosing on a home house that the buyer paid you 95% of the value for.
6. Speak to a lawyer. The courts in your area may take as long as two years to get a foreclosure on a mortgage, but only six months to foreclose on a contract for sale. Determining all the options up front can help you make a wise decision.
This technique can help you sell your home quickly and for full market price. Just get all the facts up front before the closing takes place.
Hubert Miles is the founder of Waterfront Houses USA, an online marketing service that provides Waterfront Homes and Waterfront Homes For Sale in the US and Canada.
categories: real estate,land,house,home,financing,finance,business,mortgage,coastal,river homes
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