Seller financing for real estate is a popular way to go for many people. But you may ask, why would someone offer seller financing? A true to life example would explain that best. Years ago a man bought a rental property, but after owning if for a while, realized that being a landlord wasn’t his cup of tea. He was able to sell it a few months later for 15% more than he paid for it, and without making any improvements. Here are some of the reasons for deciding to do seller financing:
(1). The first reason, is that you can get a higher price. Buyers will pay in order to get easier terms. Put yourself in the buyers’ shoes. He can get a property for low cost that the renters are actually paying for. Even if down the road he sells for less than he paid, he makes out. He can sell the contract if he needs to for cash.
(2). You get a good return on your money. The man in the above example gets 9% annually. But when he sold the property for 15% above the paying price, he gets 9% on the entire balance. What it boils down to, is that you can avoid the landlord headaches, buy low, then sell high for good terms.
(3). You can make a faster sale. These deals will go quickly. Usually one of the first few callers will be ready to seal the deal. Seller financing is a magnet for buyers, and will give you a broader choice of buyers.
(4). If you happen to have a property that’s difficult to finance in the more conventional ways, then this is the way you get around that. And it still allows for you to get the price you want. An example is this, if you have a mobile home on some property and it’s hard to finance, then you can raise your price as much as 10% and offer easy terms, and sell it quickly. There are lots of families willing to take you up on your offer to get the easy terms.
Sometimes this type of dealing can be limited by mortgages and by previous loans. But if you own the property free and clear, you can sell it any way you choose. But even if you owe on the property, there are still other methods by which you can sell your property.