While seller financing isn’t for everyone, there are plenty of good reasons to consider it, whether you’re a homebuyer or homeseller. Also known as owner financing, our current rising interest rate environment provides even more added incentive, since with seller financing, interest rates can actually be negotiated.
What is seller financing?
Seller financing occurs when a property owner sells and take payments over time from the buyer, essentially acting as the bank.
Advantages
The list of advantages for both buyer and seller can be summed up in one word: Choices. That’s because with no ‘middle man’ like a bank dictating home loan requirements, this leaves room for what are often more flexible ‘win-win’ negotiations between the parties.
For example, do you want a 5 year loan term with a lower interest rate? Perhaps a 7 year loan term, with payments amortized over a 30 year pay schedule? Would you prefer a balloon payment within 3 or 5 years for time to make improvements before refinancing? All of these scenarios can be looked at in determining the best payment program for you, whether you’re the buyer or seller.
When buyers purchase without a bank loan, there are some significant savings, such as no lender processing fees, appraisal fees or underwriting fees. And if a buyer’s credit or income is less than ideal, some sellers are open to seller financing, when given a sufficient buyer down payment and the protection of being in first position using a first trust deed. In addition to receiving their selling price, seller financed homesellers also reap the benefit of interest income and potentially lower capital gains taxes, but be sure to consult your accountant.
Bridging The Gap With Seller Financing
Another helpful component of seller financing is that it can render a non-financeable property instantly financeable. That’s because traditional lenders typically don’t loan on properties with certain issues, such as needing major repairs, i.e., not having a foundation. A big advantage for sellers is that seller financing can also dramatically increase the buyer pool, especially when selling an imperfect property. At the same time, seller financing opens up the property pool for buyers with more home choices. In short, seller financing helps bring buyers and sellers together.
Is Seller Financing For You?
For a free consultation to determine if seller financing fits your situation, contact veteran Oregon Realtor Roy Widing via email: Roy@CertifiedRealty.com, or phone/text at (971) 258-4822. Roy has many satisfied seller financing clients and can assist you in navigating through the process.
Oregon Seller Financing 