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The Various Means of Making a Fast Home Sale Property advertisements come with several ways like lease option and owner finance especially when the real estate market is soft. When this soft real estate market occurs, signalling a buyer’s market rather than a seller’s market, property owners are required to think creatively on how to sell and could consider the mode of concessions. And so, to entice buyers, shorten listing times and create compensation for the tightening credit market situations, sellers are turning to creative financing solutions. The first means that sellers are offering is called the lease option where this arrangement allows the potential buyer to both lease or rent the property and have the choice to buy later on the property being rented. Usually, the potential buyer’s option money being paid is non-refundable, but a portion of the lease payments is often also applied on the selling price of the property.
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Another means implemented by the seller to attract potential buyers of the property is to offer seller financing, and this means that the seller offers to finance the whole or a part of the amount purchased by the buyer. In this means of purchase, which also known as owner financing or instalment sale, the buyer pays to the seller for a period of time rather than getting the traditional mortgage or bank loan as means of paying to the owner.
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It is also good for the seller to look at the advantages and disadvantages of these offered options. Among the advantages of the seller financing methods are that the down payment is generally greater, real estate taxes, property insurance and upkeep belong to the buyer, and since the buyer already bought the property, they act like the owner already thus care is given on the property. Another advantage of this option is that there is greater liquidity with private mortgage note payments than the lease payments thus making it easy to look for investors who will pay cash now for their future payments. The seller earns interest in the amount being financed and this is a good advantage. Once the buyer becomes delinquent of his or her payments in this mode of transaction, it will be difficult for the seller to foreclose as compared to the eviction process. The next negative side of this method is that the term or time of repayment is longer than on an instalment sale. Among the pros listed under the lease option are that the seller could gain some upside from the increase value of the property if the market appreciates and if the buyer will opt not to buy the property, and in case the buyer misses payments, the eviction process in this term is faster.