How To Sell Your House With Owner Financing The Right Way

Colby Hager on October 16, 2022

How To Sell Your House With Owner Financing The Right Way

Selling your house using owner financing can be exciting and a great way to generate extra income by taking advantage of the opportunity to become the lender for the buyer of your property.

However, because financing the sale of your house in this way isn’t the most common way to sell, you will need to make sure you sell your house the right way when using owner financing. To help homeowners looking to sell on terms, we have put together some tips and pointers to make sure you cover all your bases when selling your house with owner financing.

Selling With Owner Financing Tips:

Below are the top 9 tips you will want to consider in order to make sure you are selling your house with owner financing the right way. Make sure you consider all angles of the transaction in order to protect you, your property, and the buyer from any future frustration or misunderstandings. This can be a complicated but rewarding process if you take the time to understand how to go about structuring the transaction the right way.

It's Not Just About Price

When you are looking to sell your house with owner financing, the sale price is not the only factor to consider. You will also want to be sure to factor in things like the interest rate you will charge, the length of the loan, any balloon payments that may be required, and other terms of the loan. Many times, if you are willing to help someone who is working to overcome issues with their credit, they are willing to pay a higher purchase price.

Consider Your Timeline For Repayment

Be realistic about the timeline you are willing to give for repayment of the loan. In order to make sure you don’t get in over your head, it is important to factor in things like job security, health concerns, and other life changes that could affect the ability of the borrower to repay the loan on time. It is also important for you to understand your personal goals with the timeline of the repayment of the loan. If you are 70 years old for example, you may not want to create a 30-year not unless it is designed to be passed down to your heirs.

Think Through Your Terms Ahead of Time

When you are selling your house with owner financing, you will want to have a clear understanding of all the terms of the loan before entering into an agreement with a buyer. This way, there are no surprises down the road and everyone is on the same page from the start. Some important things to consider when creating your terms include interest rate, down payment, loan length, or whether or not there will be a balloon or interest rate adjustment.

Protect Yourself With Solid Paperwork

One of the most important aspects of selling your house with owner financing is to make sure all the paperwork is in order. This means having a well-written and airtight contract that both you and the buyer sign. This contract should include all the terms of the loan as well as any other relevant information about the sale and should be prepared by an attorney.

Understand What Contingency Options You Have

When you are selling your house with owner financing, it is important to understand what contingency options you have in place in case the buyer is unable to make their payments. You will want to be sure to include a clause in your contract that outlines how missed payments will be handled and what actions can be taken by you as the seller if the buyer can no longer make timely payments.

Use A Qualified Real Estate Attorney

While you are not required to use a real estate attorney when selling your house with owner financing, it is highly recommended. An experienced real estate attorney will be able to help you navigate the process and ensure that all the paperwork is in order. They can also offer guidance on what terms to include in your contract and help protect your interests.

Market the Property to the Right Buyers

When you are selling your house with owner financing, it is important to market the property to the right buyers. This means individuals who are aware of the risks and rewards of this type of transaction and who are willing to work with you to create a mutually beneficial agreement. There are a number of ways to reach these buyers, including online advertising. Make sure you are aware of fair housing rules and regulations.

Be Sure to Check Buyer Qualifications

Especially when selling your house using owner financing, it is important to carefully vet any potential buyers. This includes running a credit check and verifying their employment status. You will also want to get a copy of their driver’s license and contact information for reference. Be sure to have a real estate attorney look over any contract before you sign.

Use A Servicing Company to Make Collection Easy

If you are not comfortable collecting payments yourself, you can always use a servicing company. This is a company that will handle the collections for you in exchange for a small percentage of the monthly payment. This can take a lot of the stress out of the process for you and make it easier to get paid on time and keep track of your payments.

Selling Your House With Owner Financing to A Professional Home Buyer Like Capstone Homebuyers

If you want a quick, hassle-free sale of your home, then selling to a professional home buyer like Capstone Homebuyers is your best bet.

We are all-cash buyers and can close on your house fast – usually in as little as 7 days! Plus, we don’t charge any fees or commissions, so you can keep 100% of the proceeds from your sale. But if you want to sell with owner financing, we buy in those situations too! We can help find a solution with terms that will create a win-win situation for everyone!

To learn more about selling your house to us with owner financing, simply fill out the form on our website or give us a call and one of our friendly representatives will be happy to answer all of your questions.

Reasons Why You Might Consider Selling With Owner Financing in San Antonio

Colby Hager on September 25, 2022

Reasons Why You Might Consider Selling With Owner Financing in San Antonio

When it comes time to sell your house, there are a lot of ways to go about it. You can list it with a real estate agent, put up a sign in the yard, and wait for the offers to come in. Or you could consider selling with owner financing.

Owner financing is a great option for sellers who want to get the most out of their house and are willing to sell in a non-traditional manner. If you’re thinking about selling your house this way, here are the top 3 reasons why you should consider it.

Selling With Owner Financing Can Expand Your Pool of Potential Buyers

The traditional way of selling a house is to list it with a real estate agent and wait for buyers to come to you. But this can often take weeks or even months. And if your house is in need of repairs, it could be even longer.

With owner financing, you can bypass all of that and sell your house directly to the buyer without involving a bank or traditional lender. This means that you can sell your house to anyone who has the cash for the down payment, regardless of their credit score or employment history.

This actually makes your buyer pool bigger because traditional buyers can still put in an offer but now you are opening the door for buyers who are specifically looking for creative financing directly from the owner.

Possibly Sell Your House For More Than Market Value

When you sell your house the traditional way, you are at the mercy of the current housing market. If prices are low, you might not be able to get the price you want for your house. But with owner financing, you can set your own terms and price. This means that if the housing market is down but you still need to sell your house, you can offer owner financing to make up the difference.

You can also use owner financing as a way to negotiate a higher sales price. For example, if your asking price is $200,000 but the buyer only has $150,000, you could offer to finance the remaining $50,000 with an interest rate that is still lower than what they could get from a bank. With interest rates rising rapidly, owner financing will become more common and even more lucrative for sellers.

Create An Income Stream By Selling With Owner Financing

One of the best things about selling with owner financing is that you can create an ongoing income stream from your house. Once the house is sold, you become the bank and the buyer makes monthly payments to you instead of a bank. This gives you a chance to earn money from your house every month, which can be used to supplement your income or help with expenses. And if you sell the house for more than it’s worth, you could potentially make a lot of money over time.

When you act as the bank, you collect amortized interest. think about this…a $150,000 loan amortized over 30 years with a 6% interest rate collects $173,757 in interest in addition to the $150,000 principle. That means you collect a total of $323,757 over the life of the loan. How about that as an income stream and investment!

A Word Of Caution When Selling With Owner Financing

Before you decide to sell your house with owner financing, there are a few things you need to be aware of. First, make sure you understand the legal aspects of selling with owner financing. There are some specific laws that apply and you need to make sure you are in compliance.

You also need to be aware of the risks involved. When you become the bank, you are taking on all of the risks if the buyer defaults on the loan. This means that you could end up having to foreclose on the house and evict the buyer, which can be a long and costly process.

If you don’t own the house free and clear, owner financing might still be an option for you but you need to understand the way a wraparound mortgage works and get competent legal advice throughout the process.

How Capstone Homebuyers Can Help

If you want to sell your house fast and for cash, owner financing might not be the best option for you. But if you are willing to take on a little more risk and wait for the right buyer, owner financing can be a great way to get the most out of your house.

At Capstone Homebuyers, we are always looking for houses that are being sold with owner financing. We will work with you to structure the deal in a way that is beneficial for both parties. We are a qualified buyer and ready to close quickly. Give us a call today to learn more about how we can help you sell your house with owner financing.