Owner financing or seller financing homes is very prevalent in the Austin real estate market. (What is Owner Financing?) As such, sellers and buyers should all be very well informed on the subject of Owner Financing if this is the way that they want to go. This especially applies to home sellers. This is due to the fact that owner that is financing is somewhat advancing a loan to another person. In effect, the home seller becomes a bank. With Owner Financing, the home seller is actually choosing to carry back a mortgage and is opting to wait to be paid for their equity. The home seller will then be paid slowly through installments. There are some risks that are going to be associated with this option and it is good for you to use a few tricks to lessen the risks involved.
It is always good to ask for at least 10% as a down payment or higher. The Austin real estate market is very competitive and will require a lot of bargaining, but in the end, a high initial down payment will make it easier for the home seller to sleep easy knowing the buyer is vested in the property. It is not advisable for the home seller to waive the right to receive an initial deposit or take less down as the percentage of default on low down payment Owner Financed homes is much higher than those with 10% down or more.
The home seller should also make sure that they “pre-qualify” the Owner Financed home buyer by requesting credit reports, proof of employment and verification of funds at a minimum. This will ensure that the buyer purchasing the home can actually afford it. Agreeing to Owner Financing or Seller Financing without knowing the credit status of the home buyer is an unnecessary risk that no home seller should take. Forte Properties in Austin, Texas can help pre-qualify Owner Financed home buyers and has the tools and resources necessary to obtain and verify all necessary financial documentation.
When done right, Owner Financing homes for sale can be a win/win for all parties involved. Due diligence is key to ensuring all parties are set up for long term success and working with a reputable and knowledgeable Owner Financed Austin Realtor makes the process that much easier; One who has the attorneys, title companies, paperwork and processes in place to ensure every Owner Finance transaction is completed 100% legal and hassle free. If you’re interested in buying or selling Owner Financing homes, the best place to get started is with Forte properties in Austin, Texas. Call (512)981-6865 or send us an email today!