When selling a house, most sellers are attracted to the instant cash received after the close of a sale. But do you know that there are better options out there in the DFW market? Yes, you read that right. There are more profitable options than just selling your house fast for cash and one of them is “owner financing” or “seller financing”.
What is Owner Financing?
Usually, people go to banks or mortgage companies to get a loan for buying a house. In owner financing, the case is different where the seller themselves act like the bank. Instead of getting full payment from the buyer, the seller and the buyer decide a sales price. Then, they come together to come up with an agreement in which the down payment and the rate of interest are mentioned. The terms and conditions can be decided by both the parties but ultimately, it is the seller who has his say. The tenure of the agreement can be short or long depending on the choice of the seller.
Benefits of Owner Financing in Dallas/Fort Worth
You may ask yourself, “Why choose owner financing over getting all cash at one time?” Here are a few reasons which will enlighten you about the benefits which come with owner financing and why it is the right choice to make.
Higher Sales Price
Generally, you may be able to set a higher sales price for your house as compared to an all cash price. Because of the fact that you are already offering an advantage to the buyer by giving him an opportunity to make the payment in installments, you have a better chance to quote a price which suits you while making this compromise.
Shorter Marketing Time
When you are offering owner financing, you are actually providing the same benefits to the buyer as a bank would do. Therefore, your chances of attracting more buyers in a short span of time are enhanced.
More Buyers for Your Property
There is no denying the fact that more customers will be interested in your property in the case of owner financing. The flexibility of the payment method makes it the first choice of all the customers. Many sellers are looking for quick money and those that are willing to do owner financing increase the chances of your property getting more attention.
The approval processes of the banks and other financial institutions are tedious which gives owner financing another huge advantage over the rest of the methods. For most of the buyers, it an ideal situation of home financing.
A Fixed Monthly Income With Interest
The agreement usually lasts for a longer period of time which means that the seller is able to collect a significant amount of money. In the form of monthly installment, he receives a stipend and this might last for about 20 to 30 years.
As there is no bank involved, everything goes into the pocket of the seller. What other option could be better to earn 2 to 3 times more than the actual amount of the house while ensuring a monthly payment? If one is thinking of long term benefits, then no other option is more feasible than this one.
As the payment is being made to the seller over a long period of time, the amount of tax on it is reduced. This means that you are getting your hands on more money by paying less tax on it. Although it is important to review the tax statement of your area before making the decision but most of the time, owner financing tends to minimize your tax burden. A lot of money is going straight into the pocket of the seller through tax savings!
Smooth and Easy Closings
As no bank or a mortgage institution is involved, the closings of such agreements are quite easy. These types of deals can close as early as a few days after title is determined to be clear. When another financial institution is involved, there is a lot of paperwork which needs to be completed before ending the deal and it consumes a lot of time.
At any time when the seller feels that the buyer is not obliging to the terms and conditions of the owner finance agreement, they can call it off. The ownership of the house will go back to the seller if the buyer stops making payments.
Because the terms and conditions are decided by the two parties, there are fewer restrictions. Both of them can set anything according to their own suitability and do not have to cater to the needs of a third party. This reduces immense stress because even if there is a conflict, the two of them can come to a solution more easily.
All in all, owner financing is an ideal option for both the buyer and the seller. Without the bank being involved, they are free to come up with their own set of conditions and do not have to part with a portion of their money unnecessarily. It has benefits for both the parties, therefore, is a great choice when selling your Dallas-Fort Worth property.