Owner (seller) financing is a unique method of selling your Macon Georgia house that has been around for a long time.
This concept has been around a lot longer than you may think. Banks did not offer real estate financing like we see today until the late 1934 with the Federal Housing Administration (which only financed 20% of a house purchase to start with).
It allows the owner of the Macon property to finance the sale of the house instead of going to a bank for a loan. This concept has been in existence for centuries, and it became popular in ancient India where sellers took payments for high-end products worth more than what people had available at one time. In this article, we will discuss how seller carry-back financing can be a recession-proof way to sell your house and why it’s worth considering.
A Brief History of Real Estate Financing
Banks did not offer real estate financing like we see today until the late 1930s with the Federal Housing Administration. Initially, this program only financed 20% of a house purchase. However, over the last fifteen to twenty years, the United States has shared a housing market that went down in history. The 2008 housing bust claimed thousands of homeowners and investors alike. Now, we are in or near the top of another housing market spike that has encouraged an “oversold” level of new construction housing and new investing.
Seller Carry-Back Financing: A Unique Solution
Selling a house is easy when the house is newly built, updated with modern features or in the best areas of town. However, if your sellers’ market is like most, this scenario covers about 15-20% of your town. So, what about the rest of the town that lives in the older, less updated part of town, or worse still, in the lower-income areas that many banks won’t lend on?
Seller financing can be a great solution for these types of situations. It allows the borrower (house buyer) to borrow the equity of the seller’s house until they can pay off the price of the house. The great part is that if there becomes a problem, like what happened in 2008, the borrower can talk to the living, breathing lender (seller) and adjust the terms to keep both parties happy. If the issue becomes unresolved, the seller can still foreclose and sell the house again.
How Does Seller Carry-Back Financing Work?
In seller carry-back financing, the seller takes on the role of the lender, and the buyer takes on the role of the borrower. The seller offers financing to the buyer by providing a loan for the purchase of the property. The terms of the loan are agreed upon by both parties, and they are typically more flexible than those offered by traditional lenders. Sellers can finance the sale of their own house with high interest, no interest, and higher sales prices for people in high tax brackets, no payments for… whenever, one payment per year, multiple payments per month, or however works for both parties.
Why Choose Seller Carry-Back Financing?
Seller carry-back financing can be an attractive option for several reasons. First, it can be recession-proof because the borrower and the lender can work together to adjust the terms of the loan if needed. This means that both parties can remain flexible in the event of a downturn in the economy. Second, it can be more profitable because the seller can charge higher interest rates than what traditional lenders offer. Third, it can help you sell your house faster with better all-around results. Lastly, it can be tax-deferred, which can be a significant advantage for sellers.
Conclusion
Seller carry-back financing is a unique and flexible way to sell your house. It allows the seller to become the lender, providing financing for the buyer. This method has been around for centuries, and it can be recession-proof, tax-deferred, and more profitable. If you are considering selling your house, it is worth considering seller carry-back financing as a viable option. Call a Real Estate Problem Solver to find out more about how you can sell your house with seller carry-back financing.
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