Get More By Offering Seller Financing
By: Steve Gillman
An example of seller financing: Years ago I bought a rental property, and nine months later sold it for 15% more, without fixing or improving a thing. The easy terms are what sold it. I took $1000 down, and I still get a payment every month, with 9% interest.
Four Reasons To Offer Seller Financing
1. To get a higher price. As you can see from the example above, buyers pay for easy terms. From the buyers perspective, he gets a place for almost nothing, that the renters will pay for. He comes out okay even if he later sold it for less than he bought it for.
2. To get a decent return on your money. The 9% I'm getting is
nice, but the true return was much higher, since I also sold the
property for 15% more than I paid, and I get 9% on the entire
balance. In fact, for a great return without the headaches of
being a landlord, you can simply buy low for cash and sell high
with terms.
3. To sell faster. Anytime you expand the potential market for a property, you increase the odds of selling it fast. Selling with easy terms definitely invites more buyers to look at your real estate.
4. To sell difficult properties. If you have a property that is difficult to finance conventionally, offering seller financing may be the only way get it sold, and at a fair price. Of course the ways you can sell are limited by mortgages and other loans. I owned the rental free and clear, which meant I could sell it any way I wanted. There are other ways to use seller financing though, even if you owe on the property.
There are ways to do this safely too. Those topics are for another article.
About the author:
Steve Gillman has invested real estate for years. To learn more, and to see a photo of a beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com