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 San Antonio…
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 Sell My San Antonio House) 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 7 owner financing tips for sellers in San Antonio…
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).
These could be things like terms, speed of closing, repair requests, just to name a few.
Owner Financing Tip #2: Timeline
Think about the timeline you want to be paid in. Banks offer 10, 15, 20, and 30-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 30 years down the road!
How fast do you want the money? How confident are you that your buyer will be abel to make payments over the long-term?
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 or if there’s an early repayment penalty or what the late payment penalties are.
An important term is how much interest you plan to charge. This number can vary greatly but its need to be a rate that is fair for both sides.
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 that you have your documents prepared by a real estate attorney instead of using something you find online.
Make sure both you and the other party have ample insurance for the various situations that could occur.
Make sure you varify the buyers financial history before you agree to sell them your house with owner financing.
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 experienced real estate attorney can help.
This will help protect both sides of the transaction and even help keep you from making an honest mistake that could cause trouble down the road.
Owner Financing Tip #7: Document
Document, document, document…Everything should be written down. No matter how much you trust the person, you need to have everything in writing.
And make sure you save all your documents in a safe place. Hopefully, you won’t ever need them, but if you do you will want them easy to find and well organized.