If you’re interested in a specific piece of property, then make sure to look at all the options. Some will check into traditional financing and try to secure a loan with a lender or a bank. Another option is something called seller financed notes. This is a solution that can work in the favor of the buyer and seller if everything checks out on both sides.
A buyer will need to look into the seller’s history on the property. If the seller doesn’t have any liens against it, seller financed notes is a possibility. The buyer would make payments to the seller, rather than a bank or mortgage lender. The seller needs to check into the buyer’s financial history, as well as credit score, payment history, and their ability to keep up with monthly payments. Both parties should use a lawyer to make sure the conditions of the note are agreeable and accurate.
If the buyer is interested, they should make an offer towards the seller. You will need to make it very clear that seller financing is the way you want the purchase financed. Obviously, the seller needs to be agreeable. However, the seller usually gets paid top dollar on the property and the transaction will happen quickly.
Both parties will want to handle the purchase agreement the same way a normal lender would. The parties will have to negotiate the terms of the agreement, with one being the amount to finance. This will depend on how much the buyer puts down for a down payment. The payment time table needs to be considered, as well as the interest rate.
Seller financed notes can work for both parties if done correctly. However, the seller will want to make sure there are stipulations included if the buyer cannot make payments.