If you’re thinking of selling your house using owner financing, make sure you read this blog post to learn the 6 owner financing tips for sellers in Knoxville…
There are many ways to sell your house in TN. You could list it on the market with our preferred local listing partners and see what sellers will pay. You could work with a real estate buying company (like what we do here at Southern Sky Home Buyers) and get a fair all-cash offer, or you can consider owner financing and “be the bank” to sell your house to a buyer and collect payments over time.
Owner financing is an extremely valuable but under-utilized strategy when it comes to selling houses. What we’re talking about is where you (the seller) offer terms to the buyer to pay you regular payments (just like a mortgage). Here are 6 owner financing tips for sellers in Knoxville…
Owner Financing Tip #1: Don’t Focus On Price Alone
Price is just one component of a real estate transaction. Of course, you’ll want to find a price that is fair for both you and the buyer of your property, but there are other considerations as well (which could ultimately benefit you far more than the asking price would).
Owner Financing Tip #2: Timeline
Think about the timeline you want to be paid in. Banks might offer 5, 10, 15, 20, or 30-year mortgages. Do you want to accept payments over that period of time? Your buyer will want to find a timeline that works for them, too: they might not want to be paying you 25 years down the road!
Owner Financing Tip #3: Terms
The agreed upon terms of your deal are one of the most important yet most overlooked parts of owner financing. The terms might include things like how much of a down payment there will be, if there’s an early repayment penalty or a late payment penalty, and most important – how much interest (if any) you are wanting to charge.
Owner Financing Tip #4: Protect Yourself
Even if you enter into an agreement with a property buyer who is completely vetted and trustworthy, things could still go sideways – so make sure you do your due diligence with your team (friends, family, professionals, etc) to protect yourself. For example, make sure you and the other person have insurance for the various surprises that life will throw your way.
Owner Financing Tip #5: Building Contingencies
Most of your owner financing agreement will be built around the “perfect world” plan – of what would happen if everything goes perfectly as planned. However, as you know, sometimes things happen that are outside of our control, so, building contingencies in your agreement will allow you to make better decisions when the unexpected happens. For example, what if your buyer no longer wants the house, or can longer pay for it, or wants to pay early, or wants to use the house in a different way than previously agreed upon? Or, what if your circumstances change and you no longer want or need to sell fast? Agreeing to the contingencies with your buyer ahead of time will ensure the arrangement goes much more smoothly.
Owner Financing Tip #6: Hire Representation
No matter how you and your buyer will structure your owner financing deal, make sure you work closely with a real estate attorney who can help you. A poorly worded purchase agreement could end up hurting you; an attorney will ensure you are protected.
Are you thinking about selling your house?
If you’re thinking of selling and are exploring the options, consider selling directly to us. Save the hassle and headache of selling on the market. Call our team at (865) 410-8326 or click here now and fill out the form and we’ll give you a multiple offers in less than 24 hours.