Seller financing- is when the purchaser/buyer will make some sort of down payment to the seller, and then make installment payments (usually on a monthly basis) over a specified time, at an agreed-upon price, until the loan is fully paid.
The Pros of Seller Financing.
1. The closing process can be faster, Since no banks are involved.
2. Closing costs are lower, no bank fees or appraisal needed.
3. The down payment can vary, the amount can be whatever the seller and buyer agree to.
The Cons of Seller Financing.
There are also a few red flags to consider when using seller financing:
1. Buyers could expect to pay a higher interest rate than they would versus a bank.
2. Buyers will still have to prove that they are worthy borrowers, The buyer has to show they can afford the monthly payment.
3. Buyers need to make sure the seller owns the house free and clear, banking institutions have a due on sale clause, which the bank has a right to demand the mortgage to be paid in full, the lender can foreclose. The best course of action is to make sure the house has no mortgage.
For investors, finding a local investor friendly Realtor/Agent is not that simple. Most agents are not familiar with the investing process, they focus on working with potential customers who would rather buy a home they intend to live in.
Where To Find Investor Friendly Realtors?
There are many local clubs you can go to, Your local Real Estate Investor Association, meetup.com, Search Biggerpockets.com, are just a few networking possibilities that are out there.
Ask other investors who they have worked with, word of mouth will probably be the best endorsement possible.
Are They Investors Themselves?
We need to find an agent that knows & understands how real estate investing works.
In a perfect world, you want an agent who has done some investing, this way they know the process you have been through, and not offended by any offers you will make..
Meet With The Agent
Once you secure the agent, set a meeting up and explain what you are trying to do and see if they are the perfect fit.
Like a friend of mine once said, getting to know an agent is like dating, you must go through several prospects before finding that right one for you.