In today's real estate market, we are seeing more and more properties for sale flooding the market, but fewer and fewer buyers for these properties. This has caused the house prices to keep going down every month.

As a result most real estate investors find that they can no longer sell their properties as easily as they used to.

Even if you are not a real estate investor, you find that your property generates little or no interest in the market from buyers.

In this article, we look at how seller financing can generate interest from buyers resulting to a quick sale even at a higher price.

What is owner financing?

seller financing happens when the seller assumes the role of the bank and finances part or whole of the property. As the seller, you may own the property free and clear, or you may still have a mortgage on the property.

Whatever the case, I would advise you to seek help on how to structure and close your owner financed deals. Be sure to talk toy our real estate attorney and CPA.

Once the seller accepts to carry a mortgage on the property, the buyer usually pays a down payment. The buyer then makes monthly payments to the seller.

Some sellers require the buyer to make payments through an escrow company such as a lending institution in order to protect themselves. The buyer is required to file a quit claim deed with the escrow company that may be filed by the escrow officer if seller defaults on making payments.

This way, the property reverts back to the original owner if buyer defaults on the payments. The end result is that the buyer loses all the payments made on the property. This acts as a powerful incentive that protects the seller.

When a seller finances a property, there are no points or other closing costs, so the buyer could end up saving thousands of dollars. Since both parties are more open to negotiation, they both have an advantage.

Why owner financing?

Gone are the days when just fixing up the property and staging it were enough to sell it fast. Why would anyone buy your house when they can get a similar one for less?

A potential buyer must first be attracted by your terms before they even come to see the house. owner financing attracts a lot of attention for your properties.

Banks have tightened underwriting procedures, and most people ca no longer qualify for a mortgage. In addition, a lot of people have ended up with injured credit. This makes owner financing as the only option for such buyers.

As a seller, using seller financing generated lots of interest for you resulting to quick sale or even selling at a higher price.

The best price is estimated from comparable sales in the area.

However, you must be careful which properties you use as comparable sales. Properties that have been sold with seller financing carry a higher price than others sold in the conventional way. Therefore, its price may not reflect the true value of similar properties.

With seller financing, you end up selling your house faster, even at a higher price.

In a market with so many properties for sale and few buyers, real estate investors that adapt to changing trends are the ones that continue to make profits. With seller financing, they are able to sell their properties where others are unable to do so.