Seller financing it is an agreement where the seller takes care in processing the mortgage instead of a mortgage company.
The buyer should surely make a pledge by putting it in writing which the property serves as the buyer’s collateral for the load made.
HOME SELLERS PROS
INCOME IS HIGH
Remittance from a buyer would make the sellers cash flow higher, resulting to a great income.
IT WILL ELIMINATE THE REPAIR, DECORATING AND OTHER COSTING
The seller could sell the house as it is. No need for expensive repairs to make the house look it’s best.
IT WOULD ATTRACT INTERESTED BUYERS
Only few will want seller financing but for those who needs a lot of extra help for buying a house would surely be attracted to this offer.
SALES PRICE IS MORE HIGHER
Offering a home sale to someone who is other wise having trouble of being permitted. the seller is in position to name a specific price or higher.
HOME SELLERS CONS
OBLIGATIONS IN TAXES
interest of the income of the mortgage loan is considered taxable along with all other incomes
ABANDONMENT OF PURCHASE IS POSSIBLE
The seller and the buyer could agree with a tiny down payment from the buyer to accomodate the sale but ends up leaving and abandoning the property
REGULAR TRACKING OF MONTHLY PAYMENTS
The seller would sort of feel like a debt collector if the buyer is disorderly or worse.
To successfully accomplish the deal the seller would need to hire an attorney,
pay an escrow company,pay recording fees and many more.
To avoid such downsides, the seller should first evaluate the income or credit background on the borrower. The seller should require hazard insurance on the property, and a rule that says if the buyer resells the property. You’ll be owed the entire balance of the loan amount immediately before agreeing into a deal with the owner financing. You should ask for assistance from a real estate lawyer and
obtain legal advices in regard to the financing,disclosure, and the requirements that needs to be met and with documenting the deal.