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Creative Financing Tips to Sell your Home Fast


There is no doubt about the fact that trying to sell your home in the current market can be challenging to say the least. Of course, it has become more difficult to buy homes as well, which has contributed to the sluggish market. While there is an excess of available homes on the market, the buyers who would normally jump at the chance to take advantage of lower interest rates as well as prices are having trouble obtaining financing due to the tightening of underwriting regulations.

The solution to this problem is for buyers and sellers to join forces in order to achieve their goals. A trend known as ‘creative financing’ can be just what you are looking for in the current market whether you are a seller who is having trouble selling your home or a buyer who has found it difficult to obtain a mortgage loan.

Creative financing gives you the opportunity to expand the pool of people who are not only willing to buy your home but also those who can buy your home. If you rely only on those buyers who are able to obtain a standard mortgage, you could find yourself waiting longer than you want to sell your home.

Keep in mind that by offering creative financing buyers who are not necessarily letting yourself open to potentially troublesome buyers. There are many, many responsible buyers out there who are more than capable of meeting their mortgage payments on time; however, they are simply unable to qualify for a standard mortgage because lenders have become more cautious regarding underwriting guidelines in face of the softening market.

One easy way to offer creative financing to prospective buyers is to check with your current lender, provided you still have a mortgage, and find out whether they will allow what is known as an assumed mortgage. This type of financing allows the buyer to basically take over your mortgage including your interest rate and terms. You will need to negotiate with the buyer regarding the amount of money in cash you want to receive for the property, especially if you have significant equity in the home.

In the past, assumed mortgages have been difficult to obtain. In some cases it is now changing; however, as the market becomes more challenging. You may find that it is quite possible to negotiate terms on an assumed mortgage with the lender, especially if you are a homeowner that is experiencing financial trouble. The lender will often recognize that it is far better to allow the mortgage to be assumed than face the prospect of foreclosing on the property.

Another option is to offer financing to the buyer on your own. If you do not have a mortgage on the property this can be a good situation as it will provide you with residual income for some time to come. You can receive a lump cash payment in the form of the down payment. Once the contract has been completely paid, the deed can be passed right along to the buyer. This type of arrangement works best for buyers who have relocated but have not been able to sell their other property yet; making it difficult to qualify for a mortgage and buyers who are going through a divorce and may have their assets and home tied up in the divorce proceedings.

You might also consider offering partial financing. With this option, the home seller makes a portion of the financing available. This usually takes the form of second mortgages and seller carrybacks. For example, the bank might lend 80% of the total purchase price, with the seller offering 10% of the down payment and the buyer offering the remaining percentage.

You might also consider assisting the buyer who has difficulty coming up with a down payment through a lease to own agreement. In this type of situation, the buyer pays you a lease on the property and a specified portion of the lease goes into a special fund to cover the down payment. You will need to specify all of the terms of the deal in the lease agreement up front, including how long the property is to be leased. In most cases, this time period ranges between one and three years. Some sellers are also considering lease options, which allows the buyer the option to choose whether they want to buy the property or not at the end up the option period. If they choose not to buy the property they will typically lose the cash that has been built up. If you choose either of these options, it is a good idea to hire a real estate attorney to make sure that your interests are protected.


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