Owner financed homes for sale in Austin are rare these days, as most people don’t know they’re an option and others don’t care enough to learn about them. Put simply, owner financing is exactly what it sounds like: an owner, wishing to sell their home, offers financing to the person who wants to buy it. Sometimes owner financed homes for sale start out that way. Other times the buyer may be able to convince the seller to cover some or all of the financing. Continue reading to find out the most likely scenarios for this arrangement.
Owner Finance Buyer Can Not Qualify for Traditional Financing
There are dozens of reasons for why an Austin home buyer is unable to secure a home loan approval. No matter what reason, they always result in fewer options for financing. It’s tough getting home loans for bad credit, no matter what the context is for that credit or how well the person is doing now. Potential home buyers with bad credit still deserve the opportunity to purchase a new home. As such, they will often actively seek out owner financed homes, knowing that’s their best bet. It’s not as though they hope to fly under the radar, only that they know homeowners can be more flexible with the terms.
Buyers Who Don’t Want a Lender’s Help
As hard as it can be to believe, there are buyers in today’s economy who look to buy homes without a bank or other lender involved. A good example of this is people who invest in homes to then flip them for profit or use them as rental properties. To these investors, seeking help from a bank simply complicates things. It can mean tedious paperwork, for example. Other times, they may want to buy now, not wait until all the red tape has cleared. Investors often have plenty of money and only need part of the home financed, thus seeking a smaller, more convenient loan is all they need. Banks might not see much profit in providing it. Lastly, if these investors have the money, they can often achieve a lower interest rate from homeowners than from banks simply by making a larger down payment.
Incomplete New Home Construction
If you began building your home, but had to discontinue the process, you can find yourself in quite the bind. Eventually, you might have to make the difficult decision to sell it. Unfortunately, many banks won’t finance homes that are incomplete. Unless you find a potential buyer who can pay for all of it upfront, your best may become owner financing.
Not only might owner financing be your only option to sell the home, it might be the only way to entice a potential buyer into purchasing an incomplete property that was being built for someone else.
Owner financed homes for sale are a unique thing to find because owner financing can carry certain risks and work for the seller. Nonetheless, they happen in Austin every single year. Above are some of the most common examples of when buyers seek the owner financing option. Despite how big a role banks have in real estate, Austin owner financing will always play a part.