Points to Keep in Mind Before Offering Owner Financed Homes

Owner Financed Homes in Albuquerque

In today’s real estate market, many owners are selling their homes with only the help of an escrow company.  These sellers could also offer to finance the home for the buyer.  This enables the buyer to avoid getting a loan from the bank because the original owner will lend the buyer the total purchase amount.

Owner financed homes can help both the buyer and the seller.  The buyer has the advantage of a faster closing process with lower closing costs, a flexible down payment and the ability to work directly with the previous owner until the contract is fulfilled. The seller also benefits because they can sell the home faster, minimize carrying costs and use the buyer’s down payment to pay their own debts or put a down payment on another property.  But before offering owner financing, Sunwest Escrow of Albuquerque believes that there are a few points both buyers and sellers should know.

Points to Keep in Mind Before Offering Owner Financed Homes

●        Always run a credit check. Even though it’s not necessary, owners should always run a credit check on their buyers.  It’s also a good idea for the buyer to do some investigation of their own to make sure that the seller is the legal owner of the house and that there are no liens or owed debts on the property.

●        Understand loan amortization and balloon payments.  A seller will typically not agree to a 30-year payment plan.  Instead, they’ll shorten the amortization period and expect balloon payments which allow the buyer to pay set payments for a certain period then pay the remaining balance when the period concludes.

●        Secure the loan with the property.  If the buyer defaults, the seller can legally foreclose on the buyer and take ownership of the property.

Sunwest Escrow Owner Financing Homes Albuquerque Advice

Owner financing can be a beneficial way for buyers and sellers to conduct a real estate transaction, however, they must be aware of the pros and cons of the process.  For more information about owner financing options, call Sunwest Escrow at Albuquerque today!