You may have seen this advertised, but what does it mean?
Owner financing is also called seller financing. It is a type of mortgage agreement made directly between a home seller and a home buyer, cutting out traditional mortgage lenders.
While you still hold ownership, you can sell your property through owner financing and gain a great deal of profit on your investment. Be your own bank and Earn a passive income through owner financing!
There is commonly a time limit on the loan to allow the buyers time to straighten out their credit issues over a two or three-year period. Should your buyer default, they would have to relinquish their rights to the home.
In this type of financing, sellers can create their own terms. They can make several creative financing arrangements to suit the needs of the buyers, as well as your own. It is advisable to seek legal counsel to ensure that the contract protects both yourself and the buyer in the transaction.
While you may be financing the entire loan for some buyers, others may find they qualify for a conventional mortgage but still fall short of the required downpayment to get into your property. Therefore you could finance only a portion of the transaction.
To learn more about providing this opportunity to buyers, we will discuss four benefits of using owner financing to sell your house in Phoenix.
1. Non-Negotiable Price
One of the benefits of using owner financing to sell your house in Phoenix is that you are sure to get your asking price as if you set it in stone. You hold the advantage.
The borrowers are willing to pay extra for the opportunity to enjoy the benefits that homeownership brings. If housing prices drop, you benefit from selling at a profit and gain the interest earned during the life of the loan. If housing prices rise, the buyer may achieve an increase in equity when they refinance the property.
2. Current Cash Flow
The monthly payments towards interest on the loan will add cash monthly to your regular income, which is an attractive benefit of using owner financing to sell your house in Phoenix. And the return on your investment is typically higher than with most fixed-income investments.
As the downpayment is negotiable, you’ll receive an extra cash boost when the buyers close. You can even negotiate periodic payments to help the buyers meet your demand for the downpayment of up to 20 percent or more over time.
3. Quick Closing
One of the benefits of using owner financing to sell your house in Phoenix is that you can skip all of the red tape associated with traditional mortgages. This speedy process means your home will sell and close fast, which is a plus to buyers who are excited to make a move from renting to homeownership right now.
The ability to close in 30 days or less may even make your home stand out among many to a buyer with an urgent need to move.
4. Buyer Pool
By offering seller financing, you open the ability to purchase to a whole new market. Having more potential buyers for your property is an excellent benefit of using owner financing to sell your home in Phoenix.
As buyers are entering the market, all too many may now find themselves with less than perfect credit. This status prevents them from financing a new home through conventional lenders as they are unable to meet the stringent qualifications for loan approval. This underserved sector of potential homebuyers is where you can step in as a home seller and offer a beneficial solution to you and the buyer.
Oak Street Properties fully understands the benefits of using owner financing to sell your house in Phoenix. If you would like to learn more, Oak Street Properties is happy to answer any questions or concerns you may have, with absolutely no obligation. Call Oak Street Properties at (480) 637-5500 or send us a message today!