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If you need to sell your home in today’s market be prepared for a long, expensive and painful process. Many sellers are faced with either dropping their price to unacceptable levels or having to rent their house out while they search for cash. However there are alternatives. It’s called private home lending and it can be a very useful alternative in a down market such as ours for both the seller and buyer of real estate.

A large percentage of people throughout the country cannot get approved for bank funding to buy real estate because of their credit situation. Many of these people are still in the market to buy a house, however. People with less then perfect credit are often frustrated with the limitations of apartment living or being renters; as a result, many are willing to pay a higher price just for a chance to get seller financing and improve their quality of life. A savvy property seller who recognizes this opportunity can salvage an unfavorable situation and turn it into a seller's market.

Sellers who want to both obtain their desired home price and close on the deal quickly should consider seller financing. Seller financing is a powerful tool to remedy real estate sales that otherwise would never get done.

Given the recent collapse of traditional lending, seller financing is readily becoming the alternative path to homeownership for millions of Americans. Seller financing can be a good option for sellers who want to sell but don't need to receive the whole purchase amount in one lump sum.

Seller financing can also be more flexible and attractive than those offered by banks. The parties are free to negotiate interest rates, down payment, payment ratio between principle and interest or have a lump-sum payment at the end of the term. A seller who has offered the buyer seller financing must be willing to take the risk of default but the upside for the seller is that title can remain with the seller until all the payments are faithfully made – including the big balloon payment at the end. With seller financing, the buyer can enjoy a smaller monthly payment and down payment and obtain approval status at the discretion of the seller rather then a slow-to-lend bank.

A major advantage of seller financing is that the terms of the deal are totally negotiable. This can benefit both parties. With seller financing, you can offer favorable rates and terms to the buyers. For the seller, this means being able to get a much higher price for the home. For many buyers it’s a good way to make a deal happen if the money isn't there now but will be there in the future, such as in the case of young professionals like doctors and lawyers, who are still paying off student loans, and who are cash poor but will be earning high levels of income in three-to-five years.

Sellers who finance homes usually ask for a five to eight year payment period, often concluding with a balloon payment at the end of the term. The balloon payment is usually made through traditional financing by the buyer.

Once a seller has sold the property through seller financing, the seller can then turn around and sell the secured note to a note buyer for a lump-sum payment. By locating someone willing to buy the note and the stream of payments that come with it, the seller will have ready cash for a down payment for another home or for any other purpose. In this market where price opportunity is great for a buyer, this strategy is meeting with great success.

For more information on note buyers visit www.anniekimnotespecialist.com or call 818-415-1788.

Seller and Buyer Financing Benefits:

By using this type of creative financing, the seller could actually end up getting more than the original asking price - without resorting to the questionable strategy of patiently waiting for the right buyer, which may or may not exist in today’s market. Here are some of the major benefits:

• Expect a much faster closing and there is no need to wait for appraisals, committee decisions, and financial approvals.
     
• There is no institutional credit process for purpose of qualifying purchasers.
     
• There is no need to upgrade the property to qualify.
     
• You can often obtain a much better rate of return on your money. Typical rates on real estate instruments are usually much higher than those of bank savings accounts or CD's.
     
• Large-sum down payments are not required and therefore easier to sell.
     
• Terms can be easily customized to meet the needs of both buyer and seller.
     
• There may be some valuable tax considerations. Please consult your CPA or tax advisor for details.
     
• Your deal is a negotiable instrument, so you can get a return on your money now and sell it later for cash or borrow against should you elect later.
     
• In today’s market you are likely to obtain a much higher value due to the fact that the purchaser does not need to qualify for a standard mortgage, pay points, appraisal fees, loan fees, and expensive inspection charges. The net of this is that you can often sell a private instrument and obtain a higher cash price in today’s unstable market.

If you’re a seller or holder of a mortgage note you can get more information on how to sell that note for cash now through a specialized note seller.

• Learn more on note buyers and how to find them.