Price and Terms
Most buyers and sellers go through the traditional methods of getting
a home mortgage loan from a financial
lending institution. Most people
have some money either saved or made from the sale of a prior home
to use as a down payment. But most people need to borrow the amount
of money it takes to buy a house. Once a buyer has made an offer
that the seller has accepted, the buyer needs to get a loan for the
agreed upon price of the house. One thing that a seller should ask
a real estate agent who calls to make an appointment, is if the buyer
had been pre-qualified to afford the house they are viewing. It's
not uncommon for some potential buyers to look at houses out of their
price range. This wastes the time of the real estate agent and the
seller. In most cases it is not a problem, but being proactive can
save a lot of time and disappointment.
There are alternative methods to homeowners who are anxious to sell, who are
not in need of the money from the sale of the house, and who sometimes consider
seller financing. This type of financial loan can be done by taking on a second
mortgage, or even financing the entire purchase if the seller owns the house
free and clear. Seller financing differs from a traditional loan in that the
seller does not give the buyer cash to complete the purchase. It is in essence,
a land contract. Which means the seller replaces the financial lending institution
to the buyer. This loan involves extending a credit against the purchase price
of the home while the buyer executes a promissory note and trust deed in the
seller's favor. As in loans from lending institutions, they give you the deed
to the house, but in seller financing, the seller holds on to the deed, until
the buyer has made the last payment. These special circumstances must be acceptable
to the seller of the property. After the terms are worked out between buyer
and the seller the title or escrow company prepares the necessary paper work.
The one thing the seller needs to be sure of if they choose this situation
is the buyer's credit rating. The seller needs to make sure that the buyer
can make the proper payments in a timely manner.
There are a myriad of loans that people can qualify for, all with different
terms that suit all needs and circumstances. Make sure to speak to your mortgage
lender and real estate agent about what options may best suit you. |
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