Have you every seen a home advertised with “owner financing available” and wondered what it meant? While you still hold ownership, you can sell your property through owner financing and gain a great deal of profit on your investment. There is commonly a time limit on the loan to allow the buyers time to straighten out their credit issues over a two or three-year period. Should your buyer default, they would have to relinquish their rights to the home. Sellers can make several creative financing arrangements to suit the needs of the buyers, as well as your own. It is advisable to seek legal counsel to ensure that the contract protects both yourself and the buyer in the transaction.
While you may be financing the entire loan for some buyers, others may find they qualify for a conventional mortgage but still fall short of the required downpayment to get into your property. Therefore you could finance only a portion of the transaction. To learn more about providing this opportunity to buyers, we will discuss five benefits of using owner financing to sell your house in Teton County, Idaho.
Sell For Top Dollar
One of the benefits of using owner financing to sell your house in Teton County, Idaho is that you are sure to get your asking price as if you set it in stone. You hold the advantage. The borrowers are willing to pay extra for the opportunity to enjoy the benefits that homeownership brings. If housing prices drop, you benefit from selling at a profit and gain the interest earned during the life of the loan. If housing prices rise, the buyer may achieve an increase in equity when they refinance the property.
The monthly interest payments will add cash monthly to your regular income, which is an attractive benefit of using owner financing to sell your house in Teton County, Idaho. And the return on your investment is typically higher than with most fixed-income investments. As the down payment is negotiable, you’ll receive an extra cash boost when the buyers close. You can even negotiate periodic payments to help the buyers meet your demand for the down payment of up to 20 percent or more over time.
Avoid Capital Gains
Selling your property on owner financing is considered an installment sale, which will allow you to spread your capital gains out over a period of time. Especially if you have owned your property for a long time, have a lot of equity and have taken depreciation over the years, an outright sale of real estate can often push you into another tax bracket for the year. So not only do you have to pay the tax burden all at once, but you may have to pay a higher rate. So, reducing and spreading out capital gains taxes is another benefit of using owner financing to sell your house in Teton County, Idaho.
One of the benefits of using owner financing to sell your house in Teton County, Idaho is that you can skip all of the red tape associated with traditional mortgages. This speedy process means your home will sell and close fast, which is a plus to buyers who are excited to make a move from renting to homeownership right now. The ability to close in 30 days or less may even make your home stand out among many to a buyer with an urgent need to move.
Bigger Buyer Pool
Having more potential buyers for your property is an excellent benefit of using owner financing to sell your home in Teton County, Idaho. As buyers are entering the market, many may find themselves with less than perfect credit. This status prevents them from financing a new home through conventional lenders as they are unable to meet the stringent qualifications for loan approval. This underserved sector of potential homebuyers is where you can step in as a home seller and offer a beneficial solution to you and the buyer.
Brady Buys Houses fully understands the benefits of using owner financing to sell your house in Teton County, Idaho. If you would like to learn more, Brady Buys Houses is happy to answer any questions or concerns you may have, with absolutely no obligation. Call Brady Buys Houses at (208) 298-5422 or send us a message today!