What are the benefits to YOU as the seller for selling on terms?
Benefits of Seller Finance/Carry Terms
Sellers selling with Seller Finance will typically get a higher price than the market would offer as buyers for these properties are more sensitive to payment and not price. Price is usually the 4th or so most important factor to seller finance buyers.
NO dealing with the banks, YOU become the bank. This eliminates many of the inefficiencies of selling a home the traditional route.
Fast closing time by eliminating the lengthy loan approval process and enable the buyer to purchase the property quickly.
Many Seller Finance buyers will buy in "as-is" condition and not ask for repairs of any sort.
Major tax advantage - You capital gains tax would be spread out of the years you are financing instead of one lump sum.
Its common in Seller Finance for Buyers to cover closing cost.
Seller typically will save from paying agents commissions but will have choice to have selling agent representation/compensation.
Typically no buyer agent commission as buyers will cover that.
Guaranteed Cash flow for years to come with interest - Seller would instantly upgrade from landlord to lender and truly make passive income because you would not be liable for the property or its performance.
Regardless if the property gets rented, or needs repairs, you would receive a monthly payment.
If you inherited a property and want cash flow but not the head ache, this would be a great solution.
This is great if you have multiple heirs. The monthly payments could be made to your trust which could then be distributed to each beneficiary which would be a monthly reminder of your legacy and what you created.
A Title Company in your city will add explicit language into the Deed of Trust and Promissory Note to protect your interest in the property should the buyer ever not be able to perform.
Benefits of Subject To Terms
Typically nets you the most equity by selling at a higher price and less selling cost.
There is no bank underwriting. Eliminating underwriting will reduce closing time to as quick as 10 days.
The property bypasses appraisal and is typically sold with no repairs as-is condition
Buyer typically covers closing costs. (optional)
Seller saves the cost of buyers agent which the National average is 2.4% of selling price
Buyer would clear any behind payments and arrears with down payment.
Your credit score would improve with each on-time payments. The mortgage stays in your name and it continues to build credibility on your credit.
Your Debt To Income (DTI) would be adjusted by showing a note that someone else is paying off your mortgage. We use a 3rd party servicing company to track and record this so it will have a minimal impact on your ability to purchase a home in the near or long term.
If they can show that their current mortgage is being paid by someone else, then normally 75% can be removed from their DTI, and 100% after 12 months.
A Title Company in your city will add explicit language into the Deed of Trust and promissory Note to protect your interest in the property should the buyer not be able to perform.
