There are many offers and ads how to sell properties, from lease option to owner financing, especially when the real estate market becomes soft. During this time, property owners understand that it is now the time of buyers’ market rather than the sellers’ market, leading these owners to be creative in selling and in concessions.
Therefore, sellers are turning to some creative financing solutions in order to entice buyers, shorten listing times and create compensation for the tight credit market.
Their first approach is a lease option which allows a potential buyer to lease or rent the property combined with an option to later buy the property. Usually, the potential buyer’s option money being paid is non-refundable, but a portion of the lease payments is often also applied on the selling price of the property.
The next option that a seller would offer to a potential buyer is called the seller financing from http://www.montebuyshouses.com, and in this type of arrangement, the seller confirms to finance all or a portion of the purchase for the buyer. This method is also termed as owner financing or instalment sale, where the buyer makes the payment to the seller for the agreed period of time rather than getting a bank loan or a traditional mortgage loan.
Using these alternatives to sell one’s property, it is better for the seller to consider the pros and cons of these methods.
The pros cited in a seller financing method are the usual greater down payment, it is the responsibility of the buyer t pay for the real estate taxes, property insurance and upkeep, and thus the buyer would tend to act as the owner of the property having bought the it already. In this manner of purchase, another advantage comes with greater liquidity in payments through private mortgage compared to lease payments, thereby attracting more investors to pay cash than pay later. The seller from Monte Buys LA Houses earns interest in the amount being financed and this is a good advantage. Once the buyer becomes delinquent of his or her payments in this mode of transaction, it will be difficult for the seller to foreclose as compared to the eviction process. The next negative side of this method is that the term or time of repayment is longer than on an instalment sale.
With the lease option, the positive side of it are a faster eviction process if the buyer misses payments and that the owner of the property will gain some upside of the value of the property if there is an appreciation of real estate market and if the buyer will not push through in buying the property. Continue reading at http://www.encyclopedia.com/topic/Real_estate.aspx.