Phoenix Sellers and Buyers Could
Take Advantage Of Owner Financing.
Saturday, April 28, 2007
About 20% of all homes sold involve some degree or form of owner financing. There are many factors that must be considered from both the sellers and owners side and each should consult with lawyers and accountant professionals for tax and legal advice. But here are some benefits and advantages of considering some form or level of owner financing.
Although a buyer may have "financial clout" and be able to service a loan, for various reasons some home buyers may not qualify for a mortgage loan. Among those reasons may include a recent change in employment or a divorce. Perhaps a buyer has recently started a business or has other real estate mortgages. Mortgage lenders don't like to see recent changes. Often, non-USA citizens have difficulty qualifying for a home loan.
When a mortgage lender is not involved, escrow closing can occur much quicker and a greater degree of financial and personal privacy is maintained.
When a seller is willing to offer or consider some degree of owner financing, there could be several benefits. First, it enlarges the pool of potential buyers which in itself enhances a quicker sale and an improved ability to not only get a full asking price but possibly more than the asking price.
Other benefits include obtaining a higher interest rate than a seller could otherwise get through other forms of investment such as CDs or treasury bills and a longterm, consistent monthly cashflow.
A seller must be confident. There should be a sizable down payment to protect against default as well as other protective mechanisms. Therefore, a seller should definitely see some legal advice to prepare protective documents. There could also be tax implications that could be either favorable or unfavorable. So a conversation with an accountant is very prudent.
If you are considering purchasing real estate in the Phoenix, Arizona area including Scottsdale, get quick access to the Phoenix MLS for homes in Phoenix, Scottsdale, Chandler, Mesa, Paradise Valley, Carefree, Fountain Hills, Tempe, Glendale and all other Metro Phoenix communities.
Return to our Phoenix Real Estate home page.
Real Estate Buyer's Perspective.
Although a buyer may have "financial clout" and be able to service a loan, for various reasons some home buyers may not qualify for a mortgage loan. Among those reasons may include a recent change in employment or a divorce. Perhaps a buyer has recently started a business or has other real estate mortgages. Mortgage lenders don't like to see recent changes. Often, non-USA citizens have difficulty qualifying for a home loan.
When a mortgage lender is not involved, escrow closing can occur much quicker and a greater degree of financial and personal privacy is maintained.
The Real Estate Seller's Perspective.
When a seller is willing to offer or consider some degree of owner financing, there could be several benefits. First, it enlarges the pool of potential buyers which in itself enhances a quicker sale and an improved ability to not only get a full asking price but possibly more than the asking price.
Other benefits include obtaining a higher interest rate than a seller could otherwise get through other forms of investment such as CDs or treasury bills and a longterm, consistent monthly cashflow.
A seller must be confident. There should be a sizable down payment to protect against default as well as other protective mechanisms. Therefore, a seller should definitely see some legal advice to prepare protective documents. There could also be tax implications that could be either favorable or unfavorable. So a conversation with an accountant is very prudent.
If you are considering purchasing real estate in the Phoenix, Arizona area including Scottsdale, get quick access to the Phoenix MLS for homes in Phoenix, Scottsdale, Chandler, Mesa, Paradise Valley, Carefree, Fountain Hills, Tempe, Glendale and all other Metro Phoenix communities.
Return to our Phoenix Real Estate home page.
posted by Team Best Phoenix at
6:45 AM
