Sell a House in a Down Market

How many times have you read the news this year and seen headlines talking about how home prices are down, foreclosures are up, and the average time to sell a house has doubled, tripled, Sell my house Fast in New Jersey for cash and in some places can take a year or more???

What if I told you it is possible to sell your house in two week. Not only can I tell you about it, I have done it – and I have a running record of having my buyers lined up, and ready to sign papers within two weeks of posting advertising.

In case you are wondering, this is not something the average homeowner is aware of. There are still some old timers out there who remember the days of land contracts and purchase options, but most buyers today have never even heard of these types of deals, much less heard of them. These type transactions can go by many different names, and at one time (before Real Estate got neatly packaged and wrapped by realtors, brokers, lenders, and builders) these type transactions were the norm…

So, what am I talking about?

Selling your house with owner financing.

This can be called a lot of different things in a lot of different places: selling subject to, selling with terms, a wraparound mortgage, lease option, purchase option, rent to own, selling a mortgage, financing the buyer, etc. Regardless, they all mean the same basic thing, with minor tweaks to meet local laws and regulations: you as the owner sell to a buyer and act as a bank to provide the buyer with a “mortgage” or a contract to own.

I don’t have the room to go into all the finer details, and I can’t tell you how to do it specific to your area – as each state, and sometimes even each county has its own special rules about buying and selling real estate. What I can tell you though is that wherever there is real estate, you will find Real Estate Investors, and Investment Corporations. And a lot of these investors and corporations often use unconventional strategies to purchase real estate. The kind of deals I am talking about are very common in Commercial Real Estate, and I can guarantee you they are being used in your area in some form or another.

It works something like this: 1. A buyer wants to buy real estate, but does not have enough cash and cannot get financing to purchase the property. A lot of times these buyers hit a rough patch, and even though they are perfectly capable of making the payments, the banks reject their requests. 2. The seller wants to sell his property, but is having trouble finding someone who can purchase with cash, and or get full financing for the deal. 3. The seller proposes to sell the property to the buyer with partial or full financing. 4. The seller finds a law firm or title company who is familiar with writing these types of contracts, and understands the laws of the land enough to keep every one honest and in good terms. 5. The seller and buyer agree to terms (sales price, interest rates, payments, length of contract, etc.). 6. The title company or law firm writes the contract and oversees the closing and turnover of the property.

These types of deals have a lot of benefits, but they can also have negative consequences. I will share just a few with you.

The first and most obvious benefit of using one of these techniques, is you will be able to sell your house even in some of the worst hit areas of the country. The second is you can actually make a little profit from selling this way. The third is you will be gaining experience as an investor. I am a firm believer in the power of real estate investing. To some people, the best part may be having long term passive income from your property. This is one of the biggest reasons why investors do deals like this.

Some possible negative consequences mainly stem from inexperience, of trying to fly solo on something like this. The biggest is you could end up in court if the deal goes sour (or if the contract was poorly written – I had one very good learning experience like this from taking a generic contract and trying to rewrite it myself). The second is the buyer can default, and you may end up with the property again. And, if you receive the property back, property values may have fallen even further (although some areas of the country are seeing appreciation again). The third is you are dealing with buyers that have had credit troubles in the past, so you can probably expect to a little more work dealing with the buyer and their issues.

If you are considering trying something like this, I recommend you research the options available to you in your area thoroughly. Definitely hire a professional firm to write the contracts. Finally, think long and hard about the benefits and risks before you make your final decision.

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