How Home Sellers Can Earn Tens of Thousands By Making One Simple Change

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With the real estate market being in the headlines in recent years, many home sellers might feel a bit jaded about their ability to get their homes sold.  You might even think that you are destined to lose money if you pay attention to all of the media reports.  However, this might not be the case for all sellers.  In fact, there's one set of sellers that can come out on top by making tens of thousands of dollars more than originally intended.

Who are these sellers?  These are the sellers that are able to do owner financing. If you own your home free and clear, you can stand to make a lot of money in this current real estate market.

Believe it or not, there are many buyers who are highly qualified but unable to get traditional financing for one reason or another.  For instance, self-employed people are having a lot harder time getting financing these days simply because mortgage guidelines have tightened up to the point where they have a hard time qualifying for traditional financing.

These people often have great businesses or jobs as well as a great income.  However, regular banking institutions and mortgage companies are pushing them away because they don't meet the stringent guidelines set forth these days.

Let's look at an example of what a home seller could end up making.  In our example, let's assume the house is worth $200,000.  However, home sellers often get a premium when they offer owner financing because it's so hard to find.  In fact, you could eventually get 10% over the value of the house.  So, in our case, the sales price will be $225,000.

In our scenario, let's assume that you're also going to do a five-year balloon.  You can also add a little higher interest rate than mortgage companies and banking institutions are offering right now.  So, in our example we will use a 5% interest rate with a five-year balloon.

When all is said and done, our home seller will earn an additional $75,000-$80,000 by having owner financing in place!

Of course, it is always my recommendation that you speak with your CPA or attorney before entering into an owner financing situation.  Please make sure to call on me with any real estate questions that you have.  I can explain how the deal would be structured and see whether or not it would make sense for your situation.