Six Ways You Can Protect Yourself In Seller Financing Your Home For Sale | Mortgage

Six Ways You Can Protect Yourself In Seller Financing Your Home For Sale

by HubertMiles

Are you considering selling your home with owner financing? Generally when you are offering owner financing as a means of purchase for your home, you can commend top dollar and a great interest rate. Here are six techniques you can use to lower your risk.

1. Collect a 10% cash down payment as part of the owner financing agreement.

2. Ask for other security. If you are comfortable with the buyer, but the buyer does not have the down payment requirement, ask for additional security like a car title that can be used for additional collateral.

3. Obtain a credit report. Ask your buyer to provide you a copy of their credit report. They can get one online, sometimes for free. If there are some negative things on their credit report, it may be okay just be sure that to issue has been resolved and they have recovered financially from what caused the problem.

4. Trust your gut. I know it sounds clich but usually your gut instinct is the best instinct. If you do not feel comfortable with the person buying the home, you may need to walk away. Remember you are entering into a long-term relationship with the buyer and you need to be comfortable with the transaction.

5. Analyze the situation. Let's say the buyer presents you with an offer. The bank has agreed to loan him 90% of the homes appraised value. The catch is the buyer only has 5% in cash. Are you going to let 95% of the homes value just walk away? Why not take a second mortgage back for the remaining 5% down to be paid over 5 years. Worst case scenario, you end up foreclosing on a home house that the buyer paid you 95% of the value for.

6. Talk to an attorney. Determine what the foreclosure period is in your state. Each state sets different periods for foreclosure through the courts. Knowing these things can help you sell in the safest way.

Providing seller financing allows you to get the most money possible for your home. Be smart about it and this can be a winning transaction for you and the buyer.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

Hubert Miles is the founder of Waterfront Houses USA, an online marketing service that provides Waterfront Homes and Waterfront Homes For Sale in the US and Canada.