An alternative for “unloanable” buyers to overcome the stiff underwriting rules of tight-fisted lenders is to find a cash-rich seller looking to make a deal.
In an owner or seller financing deal, the seller agrees to act as the lender and finance the property. The buyer pays back the loan according to agreed-upon terms with the seller holding the property as collateral for a loan.
The alternative real estate transaction strategy has its risks for both sides of the deal, but owner financing can be a win-win transaction for the buyer and seller when executed with a sound contract and a clear understanding of the pros and cons.
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