If you’re thinking of selling your house using owner financing, make sure you read this blog post to learn the 6 owner financing tips for sellers in Kalamazoo.
You may not be aware but there are many ways to sell your house. You could list it on the market and see what sellers are willing to pay. You could work with a real estate buying company, like what we do here at Ryan Buys Houses) and we can work with you on a cash offer or other options. One of those options to consider is owner financing. This is where you, the seller, will “be the bank” to sell your house to a buyer and collect payments over time.
Owner financing is a valuable but under-used strategy to sell your house. It’s where you offer terms to the buyer to pay you regular payments (just like a mortgage). Detailed below are 6 owner financing tips for sellers in Kalamazoo.
Owner Financing Tip #1: Don’t Focus Price Only
Price is just one component. Of course you’ll want to find a price that is fair for both of you, but there are other considerations as well which could benefit you more than the asking price.
Owner Financing Tip #2: Timeline
Think about the timeline in which you want to be paid. Banks might offer 5, 10, 15, 20, and 25-year mortgages. Do you want to accept payments over that extended period? Your buyer will want to find a timeline that works for them too; they might not want to be paying you 25 years down the road!
Owner Financing Tip #3: Terms
The terms of the deal are one of the most important yet most overlooked parts of the deal. The terms might include things like how much down payment you want if there’s an early repayment penalty or a late payment penalty, and most important how much interest you charge.
Owner Financing Tip #4: Protect Yourself
Even if you enter into an agreement with someone who is completely trustworthy, things could still go wrong so make sure you protect yourself. For example, make sure you have insurance, and the other person does as well. Consider including a clause that retains the ownership of the house in your name until the house is fully paid.
Owner Financing Tip #5: Build Contingencies
Most owner financing agreements will be built around the “ideal plan”. However, sometimes things happen outside of our control, so building contingencies allows you to make better decisions if the unexpected happens. For example, what if the buyer no longer wants the house, can no longer pay, wants to pay early, or wants to use the house in a different way than expected? What if your circumstances change and you no longer want to sell or you need to sell even faster? It is important to agree to the contingencies with your buyer ahead of time.
Owner Financing Tip #6: Get An Attorney
No matter how you ultimately structure your owner financing deal, make sure you work closely with an attorney who can help you. A poorly worded agreement could end up hurting you and an attorney can help.
Are you thinking about selling your house?
If you’re thinking of selling and are exploring your options, consider selling directly to us. If you don’t want to go through the hassle and headache of selling to the market then we might be able to help! Please give us a call at (269) 775-4095 or click here now and fill out the form and we’ll contact you right away!