Posted by phil fernandez on December 05, 1999 at 20:00:19:
Offering owner financing is certainly the way to go for the quickest possible sale. If the 10% downpayment requirement is the roadblock why not structure the deal this way :
sale price $82,500
downpayment 4,125 5% instead of 10%
create 1st $66,000 80% sell at closing
create 2nd $12,375 15% keep and receive payments
You will get more traffic offering the owner financing with a 5% downpayment vs a 10% downpayment. Furthermore you could sell the 1st you created for cash at the closing table with not a large discount because of the 80% LTV.
This is my first experience in selling a home and I’m wondering what the average time to market is for an owner financed home with 10% move-in ($82,500 sale price). I’ve had ads in the daily and weekly papers for the past 4 weeks, and even tried flyers on cars and bandit signs (as suggested on this board). Traffic has been decent, but no bites yet.
It seems the 10% down requirement is the sticking point. Half the calls hang up after hearing the $8250 down!
Is 4 weeks average? Is it too early to be thinking about dropping the price or restructuring the sale? What’s the best way to sell a home quickly? (without dropping your pants, so to speak) I’m a little hesitant to offer a lease/option, because I’ll be moving out of state shortly.
Down payments are always a big problem even in higher price ranges and even with “A” credit buyers. Everybody wants the biggest, most expensive house that they can find. One of many techniques that I like is for the buyer to get an 80% bank loan with 5% down and me as seller financing a 15% second. I get 80% cash at settlement, the buyer has put up only 5% and everybody is happy. Another advantage is that I don’t have to try and sell the first, because it is essentially already sold at the settlement table.
One clause that I insist on being in the second when I’m the buyer is that I have “first right of refusal” to buy back the second AT DISCOUNT. If the seller ever considers selling in the future, he has to call me. I’m building a source of buying discounted paper, where I’m already the borrower. Talk about knowing your debtor!
David