At first glance seller financing may not seem as a very glamorous topic. When was the last time you pulled out the fine china for tea and a lively discussion of the legal requirements of the appropriate structure of real estate security document? However, consider this; seller financing is a tool that can be used to close deals faster, sell hard-to-place properties and to finance borrowers that may not qualify for traditional bank loans. At the end of the day, the business of real estate is about having the right tools and strategy to successfully sell a property.
The market of owner financing has matured considerably since the days of taking back a note for anyone and everyone with a little “jingle money” in their pocket. Old timers can tell you plenty of stories about financing buyers without any sort of application – just steady job and a firm handshake promising to pay each month.
With this new economic market a greater sophistication of structuring has become more standardized, but don’t be discouraged; I can tell you common sense underwriting still drives the transaction. In essence, the owner financing industry has developed to the point whereas now it’s a marketable commodity. Mortgage note buyers now have at their disposal measurable statistics on industry trends, sophisticated financing models, as well as collection and servicing software.
These new methods are great news for individuals holding real estate notes or for those considering selling a property and providing financing, because it allows you to help protect your investment by building in a variety exit strategy whether you sell the loan or collect it to maturity.
Therefore, one of the most important thing to remember for someone thinking about seller financing is that it is in his or her best interest to qualify and gain a comfort level with the buyer prior to the sale by obtaining as mush information about the buyer as possible in order to ascertain their ability to make payments and honor all other covenants of the loan documents now and in the future.
Learn more about mortgage notes. Stop by Note Buyer Inc site where you can find out all about mortgage notes for sale and what it can do for you.
