Every day I get calls from people that have less than perfect credit looking for owner or alternative financing. If does not necessarily make them a bad credit risk. Often people have 1 bad mark on their credit that keeps them from getting a bank mortgage. As the seller you can request to review their credit report and determine if you want to finance them.
This could be the perfect opportunity for a seller to turn some equity into regular income at a better rate than what they could get by putting it into a bank. Of course there is risk involve but there are some benefits too.
Owner Financing Benefits to Home Sellers
Higher Sales Price.
Because the seller is offering owner financing, the seller may be in a position to command full list price or higher.
The seller might pay less in taxes on an installment sale, reporting only the income received in each calendar year.
Payments from a buyer increase the seller's monthly cash flow, resulting in spendable income.
Higher Interest Rate.
Owner financing can carry a higher rate of interest than a seller might receive in a money market account or other low-risk types of investments.
Shorter Listing Term.
Owner financing attracts a different set of buyers. If a property is not selling under conventional methods, offering owner financing is one way to stand out from the sea of inventory and move a hard-to-sell property that otherwise might not sell.
In closing, before entering into a transaction with owner financing, consult a real estate lawyer and obtain competent legal advice.