Both buyers and sellers need to hear about this alternative method.
Today, I’m here to talk to you about a form of seller financing called real estate contracts. This is a contract between buyers and sellers, and it can be very beneficial for both sides.
For buyers, this is great for people who don’t have the W-2s, credit history, or background to finance traditionally. However, it’s dependent on how much money you have in the bank and how much you can afford. Most of the time, buyers will put 20% to 25% down, and then you can negotiate terms for a monthly payment with the seller for a set amount of time. When that period is over, there’s a recall stage where the buyer can renegotiate terms with the seller, pay off the lump sum, which is called a balloon payment, or refinance under traditional mortgage terms.
Real estate contracts can be beneficial for both buyers and sellers
For sellers, you should know that this is very low-risk. You’ll get a lot of money right away from the down payment, and you’ll generate cash flow monthly without having to manage any of it. The title company you work with will collect the fees for you and notify you if there is a delinquency or delay in payment. In the worst-case scenario, if the buyer misses their payments, the contract goes back to you and you can just resell.
One important thing to note about this method is that sellers can charge a higher sales price for this service. Many of the buyers who need this service are willing to pay extra so they don’t have to get a mortgage the traditional way.
Prices are about to appreciate by about 20% in the next five years, so it's a great time to buy even if you can't get a mortgage. Therefore, this might be a great way for you to jump into the market. If you need to know more, don’t hesitate to call or email me. My number is (505) 615-8619, and I'm always here to help you.