If you’re in the market to sell your Austin home, you’ve probably received just about enough advice at this point. But if you’ve come across the method of owner financing, you’ll want to keep reading. Owner financed homes in Austin, TX do make it to the market and they do get sold. However, unless you understand what the process entails, you run the risk of losing a lot of money.
What Are Owner Financed Homes?
Put simply, owner financing refers to the practice of an Austin homeowner financing someone else’s purchase of their home. So usually a lender is involved when someone purchases a home. The lender gives them a mortgage which makes the large investment possible. Owner financed homes are homes where the lender isn’t helping with the payments, the owner is.
Why Would Someone Opt for Owner Financing?
There are a number of reasons someone would choose to take the place of the lender. Mostly it’s to help move the home off the market as soon as possible. Owner financing makes the property an option for more people, giving the homeowner an edge over their competition.
Should I Do It?: Keep in mind that, while there are owner financed homes available in most areas of the country, they are the exception, not the rule. That should tell you something about owner financing right there. It’s certainly a lot more work and part of that work will be mitigating risks. You might develop a whole new appreciation for what banks do, in fact.
It’s also important to appreciate that many of the people you will attract will be because they can’t go the traditional route. For example, many people can’t get home loans for bad credit. So they look for homes that are being financed by their owner. This means another important loss-mitigation procedure will be credit and credit/financial checks of anyone you’re considering.
If you’re selling your home, owner financing is one option you have. However, review the above information and take an appropriate amount of time to consider it carefully. Financing the sale could be an especially beneficial choice or it could cause a lot of problems if any of the many critical steps involved in the process are missed.