What is the home worth? (long) - Posted by Michael Morrongiello
Posted by Michael Morrongiello on January 26, 2000 at 19:57:51:
You started out asking $159,000.00 for the home. Where did that sales price come from? Did you have at least 3 realtors come pitch you to list the property with them? Did they provide you a (CMA) compartive market analysis indicating what other homes of similar square footage, conditon, and location have sold for recently within the last 6 months?
The burning question I would have is; “Is the home worth $159K based upon what other similar homes are selling for…?”
Lets assume for a moment that the home is worth this value. Then I would suggest you cast a bigger net and start offering the home for sale with Owner Financed terms. Try this AD;
$16,000.00 Down, $1,256.00 per month
OWNER WILL FINANCE
NO BANK QUALIFYING
Lovely 3/2 … Call Today!
The idea is find a willing buyer who has reasonably OK credit and some cash to put down and most importantly DOES NOT want to go through the hassle and intimidation of having to obtain a traditional mortgage loan and that whole process.
Ideally, a clean credit self employed individual, or a couple with high debt to income ratios, etc. are ideal candidates.
You explain to them that even though YOU are offering the financing, you will need to act like a bank but with greater flexibility. Get them to fill out a credit application and advise them that you will check their credit, etc.
The way the program works is that many buyers are more than willing to pay a HIGHER price and slightly higher interest rate for the financng IF they don’t have to jump through a lot of hoops.
By offering seller financing I am NOT implying that you will have to hold the financing. No, what you will do is to structure the financing is such a way that when the right buyer comes along you can then provide them with the option of offering your own financng with the understanding that you can then SELL that mortgage to a note funder who will pay you immediate cash for the right to step into your shoes.
You sell the home for $159K and get $16K cash down. You agree to finance the balance of $143K in the form of a purchase money 1st lien mortgage.
The rate would be 10% and it can be amortized over 30 years payable $1,254…93 P & I per month.
You will not get FULL value ($143K) for your $143,000.00 mortgage. However if structured correctly you can sell that newly created mortgage for at the SAME time you sell the home and have $133,000.00 +/- funded to you in CASH. These funds along with the $16,000 down payment should be enough to pay off any existing debt and get you on your way.
Work with an experienced note buyer who can assist you in the transaction (feel free to contact me).
I would suggest you consider thsi option BEFORE you continue to lower your asking price