Seller Financing

What is seller financing

Seller financing occurs when the Seller of a property uses their equity allowing a buyer to purchase part of or all of the purchase price in the form of a Real Estate Note.

This note is secured by the property or asset being sold. 

The Seller is now becoming the bank or lender, which in times of a very tight credit market helps a sale to take place which may not have ever taken place with out the use of seller financing.

Seller-Financing is a great way for a Seller to sell their property and get the best possible price, in the shortest period of time, with the least amount of problems.

That is what most buyer and sellers are looking for, whether it is for real estate, businesses, planes, cars, boats, or many other assets.

The Potential Market of Buyers is greatly increased many times over when the Seller, offers Seller-Financing.

Seller-Financing is the easiest method and a necessary alternative for a Seller. 

Seller-financing, attracts the motivated buyer who will be willing to pay a higher interest rate, and make other concessions higher risk the if they could just have an opportunity for ownership. 

A large percentage of potential buyers may not qualify for a loan , the primary reasons they are not qualifying for traditional bank financing include, very tough rules implemented by the lending industry, they may have high debt-to-income ratios, not enough cash for a down payment, new on the job or to the area, self-employment.

There are many Buyers who need and want Seller-financing. 

These potential Buyers are in need of a Marketplace to connect with Sellers who finds that Seller-financing, could also work for them under a mutually satisfactory set of circumstances.

The property itself may be an unconventional property and banks won't lend on, the property may be less-than a perfectly marketable asset, and will not qualify.

You may have a property that needs a lot of work, (need a new roof, bathrooms and kitchen are falling apart, broken windows, etc.) this is a perfect property to rehab, but conventional lenders and even hard equity lenders may or will not even consider, are made to order for seller financing. 

Real Estate Brokers, agents, Business Brokers, etc., know how difficult it is to find the right match of cash, terms and motivation in a transaction.

You know that the Sellers only want to consider Seller-Financing as a last resort because most Sellers want their full purchase price in cash, now. 

You also know that in the real world how difficult and how long a wait it is for Sellers in similar situations. 

By introducing Seller-financing to willing Sellers with properties and other assets they would like to sell, and eager Buyers who would like the opportunity for ownership, early on in the process, a Seller may be able to avoid the long wait in making the sale, while it lets the Broker open up the property to a much broader market immediately.

It is a Win, Win, Win situation and the property or asset moves much quicker, the Seller has their money much faster, and by bringing the Seller-financing option to the attention of the Seller and has effectively represented your client.

As the Broker you have definitely earned your commission, with creative out of the box thinking.

When the Sellers realizes, how Seller-financing works, and that the newly created note can be sold right at the closing table if they would like, or need to cash out, the alternative starts looking very promising.


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