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. Ask for other security. If you are comfortable with the buyer, but the buyer does not have the down payment requirement, ask for additional security like a car title that can be used for additional collateral.
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. 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. Talk to an attorney. Determine what the foreclosure period is in your state. Each state sets different periods for foreclosure through the courts. Knowing these things can help you sell in the safest way.
Providing seller financing allows you to get the most money possible for your home. Be smart about it and this can be a winning transaction for you and the buyer.
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.
