If you’re thinking of selling your house using owner financing, the 6 owner financing tips for sellers in Pensacola can help you to think outside the box and in most cases to get you more money in the long run than getting a lump sum at the closing day in a typical home sale. Make sure you read this blog post to learn the 6 owner financing tips for sellers in Pensacola..
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 Quality Properties Of Northwest Florida LLC) and get a fair all-cash offer, or you can consider owner financing and “be the bank” to sell your house to a buyer and collect payments over time.
Owner financing is a valuable but under-used strategy to sell your house. 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 Pensacola…
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). Things like speed of closing and saving on paying on taxes can be an addition benefit to the asking price.
Price of the house is a very important component and it will be naive to say that it doesn’t matter much. After all we all want to get more money for anything we want to sell. But focusing on the price only can lead to overlook with other benefits you could get with owner financing. Like I mentioned before. For example, if you want to move to another city or state, and you listed your home with an agent, then the agent couldn’t get the sale done. What would you do? You have to drop the price to accomplish the goal. And you’re going to keep dropping the price until the house get sold correct?
Ok now you sold the home for way less than you anticipated, and because of that you have way less money in your pocket for that result. This is the time before you start dropping the price to see if owner financing could be a better option to get more money in the long run, and also to create a cash flow that lasts for many years to come without dropping a penny for the initial listing 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!
Which this mean that you’re getting a large payment on a monthly bases if the buyer decides that he want the financing for only 5 years for example.
Getting the money on payment could also helps the person who has spending problem. Getting a lump sum payment all the sudden can leave some people with spend all that money quick enough to go back to where you were before you got the sale done.
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.
A good down payment that’s non refundable if the buyer decided to back out of the deal down the road. This down payment can secure your interest and get you a good amount of money upfront to accomplish you next financial goal. This is one import tip from the 6 owner financing tips for sellers in Pensacola.
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
Most of your owner financing agreement will be built around the “ideal plan” – of what would happen if everything goes perfectly. But sometimes things happen outside of our control, so building 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? Agree to the contingencies with your buyer ahead of time and the arrangement will be so much smoother.
Owner Financing Tip #6: Get An Attorney
No matter how you ultimately structure your owner financing deal, make sure you work closely with an attorney who can help you. A poorly worded agreement could end up hurting you; an attorney can help.
With our 6 owner financing tips for sellers in Pensacola, you can start to think outside the box when it come to creative ways to selling a home without cutting yourself short on the asking price and get the full asking price to get more money in the long run. Getting a good down payment that could get you on your way to accomplish you next goals in life, and get a steady income for years to come.
Also, the 6 owner financing tips for sellers in Pensacola we learned that you need to protect yourself by getting perhaps a non refundable down payment just in case the buyer decided to not buy the house. Then in this case you can rinse and repeat just for you to make more money with another buyer with another down payment.