For most people, the prospect of selling their home can be positively daunting. First of all, there are usually plenty of things to do just to get it ready for the market. Besides the traditional clean-up, paint-up, fix-up chores that invariably wind up costing more than you planned, there are always the overriding concerns about how much the market will bear and how much you will eventually wind up selling it for.
Will you get your asking price, or will you have to drop your price to make the deal? After all, your home is a major investment, no doubt a rather large one, so when it comes to selling it you want to get your highest possible return.
Yet in spite of everyone’s desire to get the top dollar for their property, most people are extremely unsure as to how to go about getting it. However, some savvy sellers have long known a little financial technique that has helped them to get top dollar for their property. In fact, on some rare occasions, they have even sold their properties for more than they were worth using this powerful financing tool. Although that might be the exception rather than the rule, you can certainly use this technique to get the most money possible when putting your property on the market.
Seller financing, in its many forms, has proven to be a sure fire technique for closing deals. Even though most people do not think about when it comes to selling a property, they really should consider using it. According to the Federal Reserve, there are currently over 100 Billion dollars of seller financing loans in existence. By any standard, that is a lot of money.
But most importantly, it is also a very clear indication that more people are starting to use seller financing techniques because it offers many financial benefits to both sellers and buyers. Basically, seller financing is a relatively simple concept. A loan is created when a property is sold and the seller performs like a lender by assisting in financing all or part of the total transaction. In effect, the seller is actually lending the buyer a certain amount of money toward the purchase price, while a traditional mortgage company usually funds the balance of the purchase price.
A seller loan is secured with the property. The loan then becomes the primary mortgage and is fully secured by the property. In most seller financing transactions, the buyer repays the seller with interest in accordance to mutually agreed terms over a period of time. Usually, the terms call for the buyer to send the payments, consisting of principal and interest, taxes and interest to an escrow or payment servicing company on a monthly basis. This is advantageous because it creates a steady monthly cash flow for the seller. As the note holder, the seller can decides to cash out, and sell the note for a lump sum cash payment.
Regardless of market conditions, seller financing makes sound financial sense; whereas, it provides both buyer and seller with flexible financing options, makes the property easier to sell at higher price and shortens the sales cycle. It also has the added advantage of being an excellent investment that generates a steady cash flow and high return.
If you ever need immediate cash, you can always sell the note through our office. If you are planning to sell a property, then consider the many benefits of seller take-back financing.