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 Salt Lake City…
There are many ways to sell your house. You could list it on the market and see what sellers will pay. You could work with a real estate buying company (like what we do here at YourPriceMyTerms.com) and get a fair all-cash offer, or you can consider owner financing and “be like a Lender” to sell your house to a borrower and collect monthly payments for years to come.
Owner financing is one of the most un-used ways to sell a home and is one of the most under-used strategy to sell. It’s where you offer terms to the buyer to pay you regular payments (just like a mortgage). Here are 6 owner financing tips for sellers in Salt Lake City…
Owner Financing Tip #1: Don’t Focus Only On Price
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 you want to be paid in. Banks might offer 5, 10, 15, 20, and 25-year mortgages. Do you want to accept payments over that period of time? 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 for the various situations that could occur. And 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
The majority of owner financing agreements will be built around the “ideal scenario” – of what would happen if everything goes as plan. But sometimes things happen, so building in contingencies allow you to make better decisions if the unexpected happens. For example, what if the buyer no longer wants the house, or can longer pay, or wants to pay early, or wants to use the house in a different way than expected? Or what if your circumstances change and you no longer want to sell or you need to sell even faster? Remember if you agree to the contingencies with your buyer ahead of time, everything will go so much smoother.
Owner Financing Tip #6: Get An Attorney
No matter how structured your owner financing deal may be, make sure you work with an attorney who can help you. A poorly drafted agreement could end up hurting you; an attorney can help.