How to Find Owner-Financed Properties for Clients With Credit Issues

For real estate
agents, one of the most significant challenges is helping people with poor
credit. Clients need a home that suits their budget and needs. For people with
credit issues who might be cash poor, owning a house seems to be an impossible
dream. Discover how to find owner-financed properties for clients with credit issues and become the go-to agent for this
essential niche market.

Basics About Owner Financing

With a myriad of financing and mortgage assistance programs available,
there are countless opportunities for credit-challenged clients. Owner
financing, also referred to as seller financing or a money mortgage, is a viable
option. The seller takes care of the mortgage process, rather than a bank or
financial institution. When a financial institution is unwilling to take a risk
on a client with questionable credit, owner financing can put homeownership
within reach. It’s also an excellent tool for sellers who are having difficulty
selling a house. Look for distressed properties and listings with little or no
activity for over 30 days. Homes that are for sale by owner are also excellent
opportunities.

General Terms of Owner Financing

With owner financing, the sellers usually offer short-term financing
arrangements that require the buyers to make a balloon payment at the end. The
buyers and sellers sign a promissory note outlining the repayment schedule,
interest rate, and default terms. Then the buyers make mortgage payments to the
sellers. Agents should provide clients with a list of local accountants and
attorneys, so they get the right advice along the way. Encourage reciprocal
referrals with these professionals to generate more leads. And owner financing
opportunities can be found in estate and matrimonial proceedings. Savvy agents
link with these clients by working with other professionals.

Know the Psychology

It’s easier to find owner financing opportunities when an agent knows
why sellers are willing to offer this option. Some property owners might have
inherited the house or moved out of state and don’t want to pay for insurance,
utilities, and other costs. Others may need to relocate or downsize and want to
sell the property as quickly as possible. In specific markets, the sellers may
wish to get the maximum asking price for the property, and offering to finance
the property to potential buyers is the best way to get it. Agents can approach
corporate relocators, retirees, and human resources departments to find out
about possible owner financing options for clients with credit problems.

Nothing Ventured, Nothing Gained

When it comes to owner financing, nothing ventured means nothing gained.
Agents can always inquire if seller financing is an option. If not, an agent
can be ready to provide information that supports the benefits of offering this
type of finance arrangement. Providing people with the facts helps them make an
educated decision and can open more owner-financing opportunities for clients
with credit issues. This is also a way for agents to become recognized as an
expert within this potentially lucrative niche.

Benefits for Buyers

Even buyers who have good credit might want to consider owner financing
because of its unique benefits. Often down payments are lower because the buyer
and seller enter into a private and creative financing arrangement. The closing
happens faster with fewer parties involved so that the buyers can move in
sooner. Plus, buyers can request flexible financing arrangements that fit into
their budgets and timelines for repayment. Also, the closing costs are less for
owner-financed properties as appraisals, and other paperwork is not required to
close the deal.

Market the Properties

Making connections is the groundwork for becoming a successful real
estate agent
.
Marketing properties with owner financing is a smart way to connect sellers
with credit-challenged buyers. Post listings in community centers, churches,
and other places people look for creative housing and financing options.
Research publications and sites that are specifically for a credit-challenged
audience and advertise with them. Reach out to local banks and lenders to let
them know about owner-financed properties to offer to clients who might not
qualify for a mortgage loan with them. Use hashtags for owner financing when posting
these listings on websites, blogs, and social media. Better Homes and Gardens®
Real Estate affiliated agents can choose from a variety of professional
images
to ensure
these posts grab instant attention to help them sell a house with owner financing quickly.

Knowing how to find owner-financed properties for clients with credit
issues helps agents sell a house faster. Agents who can help people in
this niche are sure to get recognized as useful resources. And with that level
of authority, comes more referrals.

The post How to Find Owner-Financed Properties for Clients With Credit Issues appeared first on Clean Slate.

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