The Biggest Mistakes A Home Seller Typically Makes When Offering Owner Financing
Offering a prospective home buyer seller financing is a great way to sell a home. You typically get top dollar and sell the home much faster. This is more truer now than ever before because not only is the housing market very depressed but lenders are back peddling on loan programs at an unbelievable rate. I keep a close eye on the mortgage business and lenders are issuing tighter regulation every day! On top of this, congress thanks to all the “contributions” from the banks are putting mortgage brokers out of business at an alarming rate And yes, there were quite a few mortgage brokers that did some bad things during the heyday but so did banks, Realtors, home builders and appraisers. But sadly, mortgage brokers could shop the market for the consumer but consumers are more and more having to call the big banks for a loan and speak to some uncaring clerk not wiling to go the extra mile for the customer. But I digress.
Home (and business property) sellers often make a few crucial mistakes when offering owner financing making the note worth less (sometimes significantly less) to a mortgage buyer. The most common mistakes are as follows: 1) Not pulling or requesting a copy of the buyer’s credit, 2) Not setting the interest rate at an above market rate and 3) Setting a balloon period that is too short. So if you are offering or thinking about offering owner financing to sell your home or business property, pay attention to these to be sure you create a valuable and more marketable financial asset, the private note.