Sell Your Home Fast

 

SELL YOUR HOME FAST IN ANY MARKET.

What is Seller Financing?
How owner financing helps you the seller.
How seller financing helps the home buyer.
FAQs
Examples of owner finance.

In a seller-financed real estate transaction-also frequently referred to as
carry back financing a property seller agrees to lend money to the buyer
to purchase and close on the property.

In essence, you (the seller) assume the role of a bank, and carry back
all or part of the loan. The buyer sends regular payments, typically
monthly. A down payment is negotiated between you and buyer as in
any other sale.

More than anything else, seller financing is flexible. So there can be
many variations on the way the loans are structured and repaid. This
flexibility allows you and the buyer to negotiate the interest rate,
payment amount, late charge provision (if any), interest and payment
adjustments (if any), any call date (balloon payment date), any
acceleration clause, and other provisions of the payment schedule that a
buyer would typically find it difficult to negotiate with a lender.

In seller financing, there is true negotiation. One party can trade any
element of the terms in exchange for the other party's compromise on a
different element. It's much easier than you may think. And once the
transaction is complete, you can easily and economically contract with
an account servicing provider to handle all the record keeping, as well as
the transfer Of funds. When you decide to cash out the note well that's
easy, just go to www.cash4noteonline.com for a free quote.

How owner financing helps you the seller.

Here are just a few of the benefits:

1. A larger pool of potential buyers

Some buyers only look for properties that offer seller financing. They
know that bank loans cost about four percent of the loan amount. Other
buyers may have difficulty getting a conventional loan. For example,
sometimes it's tough for a self-employed buyer to get a conventional
loan even if she has perfect credit.

2. A Shorter Time to Close the Sale

Transactions with lenders take longer to close. Most loans require an
appraisal and some require an inspection. The appraisal can take weeks
to complete. If the inspection reveals defects in the property the lender
might require time-consuming repairs even though the buyer isn't
concerned.

3. Tax Benefits

Tax consequences depend on individual circumstances, but big taxes
often follow a large capital gain. (Capital gain means the property has
appreciated in value and you are making a profit). The government may
take as much as 20 percent of the profit from a sale. Seller financing can
help reduce this tax. It spreads the gain over time because taxes are
paid as payments are received. Spreading a large gain over time may
prevent being bumped into a higher tax bracket or may create time to
take some capital losses to offset the capital gain. Also, some extra time
might give you a chance to reinvest in something that provides a tax
shelter.

4. Good Interest Earnings

Over time, your buyer makes payments of principle and interest to you.
Seller financing interest rates are usually 1.5 - 2.5 percent over
conventional home loans and 4 to 5 percent over money market saving
accounts. Instead of putting their cash in a CD or money market fund at
five percent, you could earn a nine-percent rate on the loan.

5. A relatively safe investment

Seller financing with a substantial down payment and a responsible,
credit-worthy buyer tends to be a secure investment. Sure, you can play
the stock market and might earn a higher return, but they would carry a
greater risk as well. Seller financing returns a monthly income with a
relatively high interest rate, and the investment is protected by real
property.

How seller financing helps the home buyer.

Owning a home is recognized as a major part of the American dream.
Yet ownership is becoming more and more difficult for many first-time
homebuyers. The growing trend of seller financing keeps that dream
alive for millions of families across the country. Many real estate
investors are seller-financing fans as well.

Check out some of the benefits below:

1. Easier Qualification

Many buyers don't fit into the rigid requirements necessary to qualify for
a conventional mortgage. But this does not mean they are bad credit
risks. They may simply have not established credit, they may be
divorced, have filed bankruptcy in the past, or be new to the country.
Seller financing gives these buyers the chance to purchase the home of
their dreams. Your buyers can help reassure the seller that they'll
receive timely monthly payments by agreeing to contract with an
account servicing provider. A good servicing company will keep all the
payment and tax records, and handle the transfer of funds as well.

2. Flexibility

With seller financing, the terms of the contract are completely
negotiable between the two parties. Depending on the relationship,
there is often no credit check. The required down payment amount is up
for discussion. Or there may be low monthly payments initially, with a
larger balloon payment down the road.

3. Cost Savings

Loan origination fees can get very expensive. Seller financing eliminates
nearly all of these fees, usually saving the buyer from four to ten
percent of the total loan price. There also may be savings in mortgage
insurance and other closing costs as well.

4. Time Savings

Getting approval for a loan, closing a real estate transaction and
transferring the necessary fees typically takes a month or more. Seller
financing moves fast. The transaction can close as quickly as both
parties agree on the terms. This means your buyer get into their new
home sooner and you get your commission faster.

5. A Great Way to Create a Solid Financial Base

How do you establish good credit if no one will loan you money? Seller
financing gives many buyers that start they need. Whether they're
buying a property from a family member or entering a contract with a
willing homeowner, seller financing will help them start building the solid
financial base a successful future demands. And by helping them, you've
made a customer for life.

F.A.Q.s

Frequently, the terms (sale price, size of the down payment, interest
rate, monthly payment, and term of the loan) do not differ substantially
from the terms of a sale utilizing conventional financing. The loan must
pay off in a period reasonable to both parties, typically as short as ten
years or as long as 30 years. The longer the loan term, the more
interest the buyer will pay.

If the seller needs cash from the sale in a shorter time horizon, perhaps
3 to 5 years, the loan is often structured with a balloon clause. When
structuring an offer to purchase property, buyers must also be aware
that in addition to the monthly loan payments, there will also be real
estate taxes, property insurance, assessments, utilities and property
maintenance.

If they can handle these obligations, buyers will qualify for an income
tax deduction and an opportunity to participate in the nation's largest
investment activity--owning property--allowing them to take advantage
of increasing value over time.

How is a seller-financed contract structured?

Seller financing can be more flexible in allowing terms to fit the
particular circumstances. In the event of unusual circumstances, seller
financing may allow an unusual term in the note. For example, a
payment may be set for the 18th of the month because the buyer will
use a paycheck from the 15th to make the loan payment. A sale of farm
acreage may allow payments to fit crop sales that occur in July and
November; in this case, payments would be made twice a year with
intervals of eight months and four months between them. In another
situation, an extra payment each year (for a total of 13) can turn a 30-
year payment schedule into a 12-year payoff.

This extra payment (which is separately calculated and not the same as
the monthly payment) may be paid when the buyer receives his annual
bonus, or in April when he receives a refund - sometimes called forced
withholding - from the IRS. This annual balloon concept is commonly
used to hold the monthly payments down, while providing a faster
payoff of the balance.

What documents are used in a seller-financed transaction?

Typically a seller-financed transaction is on a mortgage or a real estate
contract. In many states, a mortgage is the most likely choice for a
residential sale. In this form of sale, you will deed the property to the
buyer. Then the buyer signs a note back to you and secures it with the
property-on a mortgage or trust deed. In some states, the real estate
contract is also used for residential sales.

Can you sell the note?

Yes, you can. In many cases this is what the seller wants to do. There is
a whole group of investors out there that buy real estate notes. (for
more information on selling your note checkout
www.cash4noteonline.com)

Examples of owner finance.

EXAMPLE ONE

Lets assume you want to sell your home for $100,000.00. All right Lets
assume you need all cash. Find a buyer who can put down 10 to 20
percent in cash. The higher the amount the better. Next, spread the
payments over a 10 to 15 year period. The interest on the note should
be the current market rate or better. If these guidelines are followed
this would make an ideal mortgage and note. You would have no
trouble selling this note.

DO YOU SEE HOW SIMPLE THIS IS?

You needed to be cashed out. In order to get the highest cash figure,
you simply suggest figures that would give the mortgage high resale
value. Just remember, high value mortgages always have -- strong
down payments, short pay back terms, market interest rates, and their
secured by single family homes.

EXAMPLE TWO

Let's use the same house selling for $100,000.00. In this example you
don't need cash back you are looking to buy a new home you need
$50,000 for a down payment. Use the same figures the first example. 10
to 20 percent down. 10 to 15 year payback, or 20 to 30 year payback
with a 10 year balloon. When the sale on the home closes sell part of
the payments. (to sell the payments go to
www.cash4noteonline.com).

The amount for the payments, plus the figure you get from the down payment easily produces the $50,000 in cash you need. Of course, the marvelous thing is after the note buyer
receives all the payments he has bought the rights to, he returns the
mortgage and note back to you and you start to collect on it. It is a
beautiful thing.

EXAMPLE THREE

Lets assume the mortgage and note you create have the same terms
again just like both examples. This time you need $60,000 in cash, and
some monthly income. Sell half of each monthly payment. (?You can sell
the payments at www.cash4cashflows.com/estern) If the payment on
the note is $800.00 a month, you divide it in two. You get $400.00 and
the note buyer gets $400.00 for the life of the mortgage. The amount
you get from the note buyer for the payments, plus the down payment
you receive from the home buyer easily goes well over the $60,000 you
need. And, you still get $400.00 a month. Outstanding!

EXAMPLE FOUR

Lets say we have a deal that's not quite as good. You are selling your
house for $100,000.00. The best you can do is find a buyer who will put
down $7,000.00 cash. The buyer needs to have a pay back term of 30
years to make the payment affordable. You want all cash-- but you don't
really need it. I suggest you go ahead and set the deal up for a 30 year
pay back term. Place a balloon payment in the tenth year of the
mortgage. This gives the deal a short pay back term. Even though the
down payment is not the best this gives you a choice of two different
offers. The first offer would be to sell the payments (sell the payments
at www.cash4noteonline.com) only and keep the balloon
payment for yourself. The second offer would be one lump sum of cash
for the whole mortgage.The down payment is weak on this one but a carefully placed balloon
payment in the mortgage will sweeten the deal up beautifully.