Getting to Know Seller Financing

Seller financing basically implies that the seller of the house is providing financing. This signifies that the buyer does not need to get a financial assistance from other lending institution to be able to purchase the unit. Sellers usually offer such kind of service since in a buyer’s market, encouraging qualified buyers is incredibly a tough thing to do.

With seller financing, sellers are paid through monthly payments from the buyer until the debt is totally settled. And also, the house secures the loan, to be able to make it less risky on the part of the seller. Most sellers think that they can obtain a higher return on their investment by simultaneously offering the two services-selling and financing. The sellers get the money out of selling the property and interest out of financing the loan as well. Normally, they sell the cash flow note or the I.O. U to any investor. This denotes that investors acquire money for the property up front. In addition to that, in other places, the seller can take advantage of a considerable tax benefit through the said financing.

Sellers are not the only ones who can enjoy this kind of financial assistance, buyers can avail its benefits too. Those loan applicants who are not qualified can opt for a seller financing to buy a property. They can as well negotiate more with a seller than with other financial institutions like banks in terms of working out the terms of financing package. Remember a seller can be more flexible and lenient to its borrowers compared to a bank.

Moreover, as a buyer, familiarizing seller financing will be beneficial for your. Take this as an example, if you know that a seller can sell the cash flow note to an investor to be able to stay away from the responsibility on the loan, you can bargain for better terms and low monthly amortization. Besides, the seller can obtain all the money for the house from the investor up front. It is also necessary to remember that a lot of sellers will not give much importance to your credit scores when they grant you a loan. In this financing, there is usually no need for a credit investigation. Thus, if you happen to have a bad credit history but you already have recovered financially then you most likely qualify for a seller financing and eventually buy your dream house.

Seller financing is very helpful on both parties-the seller and the buyer. This is because the negotiation is a lot easier than undergoing the traditional buyer process. As for the buyer, the haggling of the price can go way down to almost what they desire for, especially if the seller is your friend or relative. You can enjoy those exemptions set by the seller. As for the seller, the investment done can possibly generate double return through seller financing. If you think of buying a house, consider seller financing if you want an easier buying process. And if you are a seller, you can try to do seller financing if you want a higher return of your investment.

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