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.

  • Tax Breaks.

    The seller might pay less in taxes on an installment sale, reporting only the income received in each calendar year.

  • Monthly Income.

    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.