If you’re thinking of selling your house with owner financing, make sure you read this blog post to learn the 6 owner financing tips for sellers in Dallas / Fort Worth that you really should know about…
There are several different ways to sell your house. You could list it on the market and see what sellers will pay. You could choose to work with a real estate buying company (like what we do here at Madison Lea Homes) and get a fair cash offer, or you can consider owner financing and “be the bank” to sell your house to a buyer and collect payments from them over time.
Owner financing is a valuable but under-used strategy by sellers when selling a house. It’s where you offer terms to the buyer in a contract, and it’s set up in a way where they will pay you regular payments (just like a mortgage).
Here are 6 owner financing tips for sellers in Dallas / Fort Worth TX so that you can determine if this option could be a good option for you…
Owner Financing Tip #1: Don’t Focus Only On Price
Price is just one component if you’re considering owner financing. Of course, you’ll want to find a price that is fair for both of you, but there are other considerations as well (which could benefit you more than the asking price).
Owner Financing Tip #2: Timeline
Think about the timeline you want to be paid in. Banks might offer 5, 10, 15, 20, and 30-year mortgages. How long do you want to be accepting payments for? Your buyer will want to find a timeline that also works for them: they might not want to be paying you 30 years down the road!
Owner Financing Tip #3: Terms
The terms of the deal are one of the most important things about owner financing and shouldn’t be overlooked. The terms might include things like how much down payment you want there to be, is there going to be an early repayment penalty or a late payment penalty for late or missed payments, and most important – how much interest are you going to charge.
Owner Financing Tip #4: Protect Yourself
Even if you enter into an agreement with someone who is completely trustworthy, things can still go wrong – so make sure you protect yourself. For example, make sure you have insurance and the other person does as well for the various situations that could occur. You should also consider including a clause that allows you to retain ownership of the house in your name until the house is paid in full.
Owner Financing Tip #5: Build Contingencies
Most of your owner financing agreement will be built around the “ideal plan” – of what would happen if everything goes perfectly. But sometimes things happen that are outside of our control, so building contingencies into the agreement will help protect you and better navigate things if the unexpected happens. For example, what if the buyer no longer wants the house, or can no longer pay, or wants to pay early, or wants to use the house in a different way than expected? Or what if your personal circumstances change and you no longer want to sell or you need to sell faster than you’d originally planned? It’s important that both parties agree to all the contingencies ahead of time and then the arrangement will be so much smoother down the road should an issue arise.
Owner Financing Tip #6: Get An Attorney
No matter how you ultimately structure your owner financing deal, make sure you have an attorney who can help you in setting up the agreement. And hiring the right attorney to help you is also important. Everyone’s got a family friend attorney who’d be willing to help you, but if that’s not their niche, that could be problematic in the end. So selecting the right attorney who’s familiar with real estate and owner financing agreements is really important if you’re wanting the best possible advice and protection. A poorly worded agreement could end up hurting you; an expert attorney can help.
So there you have it…the 6 owner financing tips for sellers in Dallas / Fort Worth, should certainly help get you started as you’re navigating your options. If you think you’d like to go ahead and skip all this and get your home sold fast, contact us today!