Thread: Why is seller financing helpful in real estate?

Originally Posted by florida real estate

Basically, seller financing makes the seller of the property assume the responsibilities and role of the bank or mortgage company in providing financial loan or assistance to the buyer. It may be a rapidly recognized practice or scheme primarily because of the tough lending conditions in the real estate market today. Some buyers would find it so difficult to qualify and pass the stringent requirements of most mortgage companies which would not allow them to purchase a house. However, with seller financing, the seller himself is the provider of the amount the buyer needed to close the deal and move on with the transaction of acquiring the property. It may be quite risky for the part of the seller especially if the buyer would eventually call the deal off, but it is still worth the transaction.

I really do not see how it is all that risky for the seller if they are able to obtain 20% down and the right to foreclose. As worse case scenario the seller gets 20% of the purchase price plus the property. Do you really understand seller financing?

Another couple of benifits of seller financing is that it allows for a steady cash flow at a rate that exceeds the bond markets, you generally can gain a higher than market price, and in a number of circumstances it can help one side step a great deal of capital gains tax.

I really do not believe the only benefit of it to the seller is getting a sale on their property. If this is all that matters then why not just reduce your sales price.

I don't think so that the seller financing will get more benefit to the seller. Actually it is more important that seller should ensure that in which prospect they are working and should not try to foreclosing.

In addition,the benefits of owner financing can appeal to sellers who are trying to unload property. Closing a deal on a house, for example, may take considerably less time with seller financing than with conventional financing.