Having trouble selling? Have you considered owner financing the deal? Owner financing tends to yield a higher selling price and excellent return on your money. But there are some risks involved. Here are 6 tips to help you minimize your risk.
1. Collect a large cash down payment of at least 10%.
2. Seek additional security. If the buyer has part of the down payment and you feel comfortable that the buyer can pay the payments, as for additional security such as a car title that can be released after a short period of time, for example 2 or 3 years, if payments are made as agreed.
3. Check the buyers credit. Don’t take the buyers word for it; get a copy of their credit report. Get the buyer to provide you with a copy of their credit report. They can get one on the internet from Equifax or one of the other major national providers.
4. Trust your instincts. It has been proven time and time again that your first impression is usually the correct one. If you have a funny feeling about the situation, it may be best to walk away and find another buyer.
5. Look at the big picture. The buyer has found a lender that is willing to give them a mortgage for 90% of the homes value. They have agreed to allow the buyer to put 5% down if you hold a 5% second mortgage on the house. The big picture is you’ll receive 95% of the purchase price up front and the remainder in payments over say 5 years. Worst case scenario, you never get paid and foreclose on a home you were paid 95% on already.
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 River Land and Coast Real Estate in the US and Canada.
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