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Sellers Considering Owner Financing

In today’s tenuous banking environment, many home buyers are being turned away by lenders for reasons other than their credit. Lenders are looking much more strictly at the properties for sale, and whether or not those homes meet new appraisal standards

In today’s tenuous banking environment, many home buyers are being turned away by lenders for reasons other than their credit. Lenders are looking much more strictly at the properties for sale, and whether or not those homes meet new appraisal standards.

Because of strict bank financing issues your pool of buyers is much smaller. As a Seller, you can attract more buyers is by telling your REALTOR that you are willing to offer owner financing.

Owner or seller financing simply means that you allow your buyer to purchase your property over a fixed period of time. You receive the principal and interest payments directly from the buyer. In other words, you become the buyer’s lender.

The solution isn’t for everyone, but if you don’t need the equity in your home as a lump sum at closing, owner financing allows you to earn a monthly income, by collecting interest as well as principal payments from the sale of your home.

All it takes is a willing seller and buyer and a good real estate attorney to structure the terms and write the contract.

The advantages to both buyers and sellers are flexible terms and lower closing costs. Sellers can also defer capital gains, if it applies, as well as a lump sum that could put them in a higher tax bracket the year of closing.

Seller financing isn’t risk free, but with the help of professionals such as your REALTOR®, you and your buyer should be able to put together a mutually satisfying transaction.

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