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Ways2Sell

 

Ways2Sell.com was created to point out the different ways a home can transfer ownership. The obvious way is the normal- put your home on the market- the property gets shown- an offer is negotiated out between buyer & seller- an offer is accepted & then a closing.

Ok- that is in a perfect world- well that scenario has become harder & harder to come by. With the current economy and more stringent lending guidelines, our buyers are harder and harder to come by. Which leads to the reason why you’re reading this letter! There are a few different ways a buyer can be procured. We thought it would be a good idea to explore these options with you.  You may find yourself thinking in a different direction!

We have listed the some different transfers that have been effective!

-Example: Seller & buyer agree on a price of $100,000 for the home- buyer will put down $3,000- seller says they will set the interest rate at 7.5%(seller sets the rate- the seller is technically the bank) - the seller says they will go with these terms for 12 months then what ever is due on the remainder of the $97,000 is due to seller at that time. Ok let’s look at the payment & interest: Payment at those terms would be $678.24 a month. After the buyer pays that payment to the seller for 12 months the seller would have gained $7850.93 in interest which would total a sale price of $108,456.73. Let’s say the seller has payments on their mortgage of $600 a month because of owing less & having a better interest rate- the buyer covered the payment plus interest relieving the seller of the stress of waiting for a better market.

-Pros & Cons: The plusses to a buyer is that after that 1 year they would show equity with-in the home & would show a history of making the payment for 12 months- both looking good to the lender they decide to go through. The negatives to a seller are that the seller would have to wait that term out to get any equity out of the home- so if the seller owes $80,000 on their current mortgage they would not walk away from the home & receive their proceeds until the 12 months is up. The buyer could walk away during the 12 months leaving the seller at square one- but the land contract is also setup stating that the down payment of that agreed upon amount is non-refundable along with any payments already received.
  • Seller Second Mortgage- Buyer needs a certain amount down but does not currently have it and the seller has equity in the home that they don’t necessarily need right now.

-Example: So let’s say the buyer has agreed to purchase the home for $100,000 & needs 10% down ($10,000)- seller agrees to front that 10% as a second mortgage on the home- holding the home as collateral if buyer does not make the terms. The seller would receive the rest of the proceeds at the closing which would generally take place with-in the conventional 30-60 days time period. They would have a second mortgage agreement in place with the buyer for that $10,000 for a term like the land contract- let’s say the seller says the interest rate is going to be 10.0% for a term of 24 months then the balance is due at that time. The seller would have received $2071.53 in interest totaling a sale of $102,071.53.

-Pros & Cons: The negative to the seller is they have to wait to get full proceeds & if the buyer defaults on the loan there would have to be a judgment put against the buyer to receive payment. The pros to the seller are that your free & clear of the home in regards to the mortgage that you had with your lender- you become a lender on a smaller percentage with the new owner & technically you hold an interest in that home for 10%- if the buyer did default & sell the home- you have the legal right to collect the due amount at the closing just like a lender would.

  • Rent With Option- A buyer would like the option to purchase the home in the future, but in the mean time would like to rent the property. The buyer cannot or will not agree to purchase the home within a normal time period because of reasons such as the lack of ability to get a mortgage right now, or the buyer is not familiar with the area and wants to get a better feel of the surroundings before making that commitment or maybe there is a sale pending on their home from which they need the proceeds.  These types of buyers could go for the options of a land contract and a seller second also!  Whatever the reason may be the seller decides to bind into a lease agreement with the buyer having an option to purchase the home after or during the term of the lease.

-Example: Let’s say the lease is 12 months for $700 a month with a security deposit of $700. The option calls for a sale price of $100,000 if buyer/tenant decides to purchase the home. Well 7 months into the lease the tenant decides to purchase the home. The tenant would have given the owner $4,900 in rent $700 in the form of a security deposit = $5,600. That $5,600 would come off the top of the agreed upon price of $100,000- the seller would receive proceeds before any closing costs of $94,400. If tenant goes the 12 months & decides not to purchase the home- they would forfeit their 12 months of rent but based on the condition of the home under the agreement in the lease would receive their security deposit back.

-Pros & Cons: The pros to the seller is they are receiving at least something on the home while  their waiting for the tenant to become a buyer & if the tenant does not purchase- the seller is 12 months out which may hold better market conditions in regard to selling the home.
  • Short Sale- This option is for a seller who is unable to make payments on their mortgage anymore. This could be due to over spending, job loss or any other adverse effect from personal or economic breakdown. The lending institutions are willing to look at the idea of receiving an amount to satisfy the mortgage that might not be as much as what the original mortgage(s) was for.

-Example: Let’s say the seller has a mortgage on the home of $100,000, which the home was worth 2 years ago. Now with market conditions not favoring the seller as much the home is only going to bring an offer of $85,000. If payments have not been made- the home goes on the market at a price of $87,500- your Realtor will make sure that any offer that comes in is "contingent upon the sellers lenders approval of a short sale". After there is an accepted offer your Realtor will get the offer to your lender for consideration. It can be a timely process! Your lender will decide if they can take that kind of loss. They weigh out if it is worth keeping the home- foreclosing & putting the home back onto the market to gain a higher sales amount. In this market not favoring the seller- that will seldom happen.

 

-Pros & Cons: The pros to this option are that the seller walks away paying less that what is owed without having that slash against their credit of a foreclosure- this will indeed help future credit growth for loans later in life. The buyer is happy because they bought a home for a good price.

Well that sums up some options that you may or may not have known about. Our company can assist you in all of these transferring options. The most important item to note is that if any of these seem acceptable options that you would like us to include within your marketing,  please let us know. This could greatly advance you ahead in procuring a buyer!

We do look forward to working together in the future and we thank you for trusting us with your Real Estate needs!

Sincerely,

Briggs Realty Group, Inc.

Briggs Realty Group was formed for you! We have mastered the technology behind real estate sales and our commitment to you is to touch on all avenues possible to help you buy or sell a home! Briggs Realty Group has all of the tools available to help with all of your real estate needs. This has turned into a family tradition and we invite you to "Experience the Tradition"!

 

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Data last updated: 09/20/2017. Some properties which appear for sale on this website may have subsequently sold or may no longer be available.