Should You Owner Finance Your Troy Michigan Real Estate?

Posted in Troy Michigan Real Estate by Michigan Real Estate Expert on January 5th, 2009

You’ve decided to sell your Troy Michigan real estate but you want to sell it quickly and for top dollar.  Have you considered providing owner financing, also known as seller financing?

Why Isn’t The Buyer Getting Bank Financing?
Usually a buyer gets bank financing when buying a home.  If the buyer approaches you with a deal that involves you doing the financing, you should ask why!  Maybe the buyer can’t afford a big down payment, and can’t be approved for a loan without it.  Or, they may not be able to get financing at all, due to no credit or poor credit.

In that case, you’ll want to evaluate if you can afford to take the risk of owner financing.  Can you make the monthly mortgage payment in the event they default? If you determine that the deal isn’t too risky, you can finance the home yourself for a greater profit.  But, there are some instances when you won’t be able to owner finance your Troy Michigan real estate home.  

When Can’t I Owner Finance My Home?
You may not know that in order to finance your home yourself, you have to be able to pay off your current mortgage in full prior to making the sale.  If you can’t afford to make the full payment, you won’t be able to owner finance the property.

If you already own the house outright, you’ll be able to finance the property.  You may decide to owner finance part of the sale price at a higher interest rate.  This would be an ideal situation for a buyer who can qualify for a bank loan for most of the sale price, but is unable to be approved for a higher loan amount to get the rest.

After a year of making payments to the bank, the buyer may be able to finance the remaining amount, and then you’ll receive a lump sum for that amount. 

What Else Do I Need to Know?
There are a lot of things to take into consideration before deciding if owner financing is right for you.  Be sure to do your homework and understand there are benefits and risks when you owner finance

It is also wise to consult with a real estate lawyer and a professional real estate agent.  As a licensed real estate broker and lawyer, I’m uniquely qualified to help you make this important decision….and I’ll keep you from making a costly mistake.

Listing your Troy Michigan real estate for sale and offering owner financing can sound like a daunting task.  Let me help you determine if owner financing will benefit you.  Call me now at 248-514-2640 or send me an email at right now!

Lee Morof
RE/MAX Showcase Homes
Birmingham, Michigan
Call:  248-514-2640

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