Robert Bruss, the nationally syndicated columnist, real estate attorney, and
investor, was recently asked, “Where’s the best place to get a mortgage? At a
bank, savings and loan, or credit union?” Bob Brusss answered, “None of these is
the best. The best source of financing for your home is the seller.” If you can
persuade the sellers to help with your financing, you can often get easier
qualifying and lower costs. Likewise, here’s what Realtor Robert Deimel says
about seller financing in a recent issue of Real Estate Today:
“In today’s complex marketplace, sellers and buyers don’t always see the
opportunity. That’s why innovative sales people often are necessary to bring
owner will carry (OWC) into the mix of financing possibilities. The key to
making more transactions happen is to understand how to encourage sellers to
offer the carrot of seller financing.”
What are these benefits of seller-assisted financing? With OWC, buyers line
up to gain these benefits:
Easier qualifying. Although many lending institutions have eased up
on their qualifying criteria, they’re still tougher than most sellers.
Flexibility. Price, interest rate, monthly payments, and other terms
are set by mutual agreement. You and the sellers can put together a
financing package in any way that works for both of you.
Lower closing costs. Sellers seldom require points, origination fees,
and loan application costs. Unlike lending institutions, sellers don’t have
to cover office overhead.
Less paperwork. Although sellers may ask for a credit report, they
won’t require a stack of forms, documents, and verifications.
Quicker sale. Seller financing can help sellers get their home sold
more quickly. Plus, for properties that require extensive repairs or
renovations, seller financing can make the difference between a sale and no
sale.
The types of seller-assisted financing that you might use to buy a home are
as varied as you or your Realtor’s imagination. But be aware – not all owners
who will accept OWC financing advertise that fact. Indeed, Robert Bruss says,
“I’ve bought many house with seller financing, but I can’t recall a single one
that was advertised ‘seller financing’. Until they saw my offer, none of the
sellers had informed their agent that they would help finance the sale.”
Regardless of whether sellers have advertised OWC, keep the possibility in
mind. You won’t know for sure until you’ve put forth an offer. The following are
several examples of seller-assisted financing taken from the pages of
newspapers:
Lease With Option to Buy $450 per month. 1 year rent toward down payment on
purchase price of $100,000.
315 DOVER-OWC. Completely Remodeled Brick bungalow, foyer, 2+ bedroom, large
kitchen and living room, oak cabinets, dishwasher, range, recessed lighting, gas
fireplace, owner finance, big yard with privacy fence. Call 400-0002
Broker
$6950 DOWN on this 3 Bedroom ranch with ceiling fans, fncd yrd. Just redone
in pale grays with new carpet, paint, etc. paid off in full in 25 years! $699.09
per month. OWNER CONTRACT! (84,950. 9.75% APR. No BALLOON! 395-3001.
R.E. Lic. / Owner
NO QUALIFY 5+ bdrm, 4 Ba. $295K. Owner Financing, only 48K dn. 4118 Catalina
Pl. Call 200-0505 / 200 – 6006
$5000 Down, $1695 month. Poway, 2 year new, 4 bedroom, 3 bathroom, pool, 3
car garage, $249,500. 1 or 2 year lease. 300-0202
1 Level Beauty $173,500 Contract Terms / Lease Option Wonderful 1 level 2
bedroom plus den – 3rd Bedroom, 2 Bathroom, Air Conditioning, island
kitchen, masonry fireplace, security, 2 car garage, fncd. More! Westside Realty
Co. 500-0001
OWNER MAY CARRY 2nd!! Near schools, best area, 3 Bedroom. Make Offer! Only
$140,000.
Century 21 330-3030
LEASE / PURCHASE. You can own your home & move now through a flexible lease /
purchase with little down. Lovely 3 Bedroom, 2 Bathroom Cape Cod with basement
on a beautiful, private, wooded ac lot. Convenient location. Hurry! Low 90s.
Buddy Boom 900-8078. Remax 970-1500
OWNER FINANCE 2+ acre estate. Large brick home with full basement, pool,
workshop, and more - $164,000. Low down payment. V. Purser 400-6285 METRO
BROKERS 800-5677
Loan reps will never tell you about the possibilities of seller financing
because they don’t originate these types of financing agreements, nor owned by
lenders, mortgage insurers, or government agencies).
Granted, super deals don’t come along every day. In strong housing markets,
foreclosures dwindle and terms of financing tighten. During the blazing real
estate markets of the late 1990s and early 2000s, homebuyers and investors often
had to search diligently for great deals with foreclosures and REOs. But times
are changing. The Wall Street Journal just reported that homeowner
delinquencies and foreclosures were beginning to jump significantly. Softening
economic conditions always conspire with easier qualifying, low-down-payment
finance plans to push weak swimmers into deep water.
If the past helps us forecast the future, the coming years are again likely
to produce a strong need for rescuers. When you’re interested in building home
equity wealth fast, or perhaps merely increasing your affordability, ask
foreclosure specialists whether borrower defaults, foreclosures, and REOs are
piling up in your area.
Although you can save big with seller financing, foreclosures, and REOs in
all times and places, soft markets produce buyer’s delight. As high tide
approaches, most buyers fear to even put their toes in the water; but if you’re
willing to take the plunge when others shiver in a blanket of worry, you will
earn large rewards.
