How To Sell Your House With Owner Financing The Right Way
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.