Owner Financing: It's Not Forever!

It’s Not Forever! Let’s assume you are selling a property. You can’t find a “qualified” buyer. Your real estate broker suggests you may want to consider owner financing. You respond with a definite “No Way.” Why? Two primary reasons: One, you want to cash out now. Two, you don’t want to be – in your mind – a landlord. But suppose you knew that you could cash out shortly after closing – say, 1-3 months. And, as a consequence, you will not be a landlord forever. You just will receive a few monthly payments from your buyer, then cash out and move on with your life. Would this make a difference in the way you think? Well, maybe – maybe, not. Right? But a little information and knowledge can sometimes change the thinking of the most reluctant seller. Let’s take a quick look at how you might be able to sell your property to a qualified buyer at your price, and not be a landlord forever. Being willing to owner finance could accomplish the following: 1. More Potential Buyers. In a tight credit market, there will be more “qualified” buyers for your property. Why? Because a little glitch on a credit report may negate a bank loan but still make your buyer a very attractive prospect. 2. Attract 1st Time Buyers. 1st time buyers have been on the sidelines the past few years, waiting to get into the game. The real estate market needs them. Owner financing helps the overall real estate market. 3. Neighbors Are Happy. We all want friendly, caring and invested neighbors. Your neighbors will be pleased knowing their new neighbor was vetted by you and is as committed to the neighborhood as they are. 4. Note Buyers Will Want to Buy Your Note. If you structure your note properly, you will attract note buyers who will be willing to pay the highest price possible. Your broker can help by checking your buyer’s credit scores and history. Someone like me can assist in suggesting note terms. 5. You Can Move On. If you have strong note terms, you may able to sell your note after receiving only one monthly payment. You don’t need to be a landlord forever. You don’t need to hold the note to its term. You can move on! True, your note will be discounted – the inherent risk means you will receive less than the principal balance. But, you are getting cash today. You do not have to receive payments over the next 20 or 30 years. And, perhaps most importantly, you can have peace of mind. Think about it!

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