So this is the deal, I’ve received calls throughout the years from potential home buyers that want to buy a home because they heard of a juicy home buying and wealth building secret… A Seller Carry-Back AKA Seller Financing. The concept is simple… Most home buyers borrow money from their bank (loan) in order to buy a home, with that loan the seller is paid off and the bank becomes the “note holder” and places a lien against the property to secure their position. With a seller carry-back, the seller becomes the note holder and places a lien against the property. So the reason I’m writing this is because a few days ago, my client that is selling his condo called me and said, “Voltaire, I want to carry paper!”. This was music to my ears! Why? Well because there are many benefits to a seller carry back:
- No Qualifying – no credit check, no job, nothing!
- No Loan Fee’s – the sellers typically don’t charge the buyer like a bank would!
- Quick Closing – The seller most times can close quickly since there is no waiting on 3rd parties!
- Earn Interest on Your Equity – instead of cashing out now, you leave your money as a lien against the home and you earn interest!
- Monthly Income – you have the income coming in monthly
- Taxes – if you owe capital gains, you owe it over time and not all at once
- Protection – You have a lien against the property and can foreclose if payments are missed
- Seller finds a buyer
- Buyer and seller agree to purchase price, length of term, interest rate, down payment.
- Buyer and seller open escrow and fill out documents
- Buyer conducts their inspections
- Buyer brings in down payment and closes on deal
- Buyer begins making monthly payments to seller.
- Condo Price: $180,000
- Down Payment: 20% = $36,000
- Note: $144,000
- Interest: 4.5%
- Term: 30 Years
- Payment: $654
Checkout the YouTube Video I created that explains it in detail! Good Home Shopping!
-Voltaire Lepe, Broker @ Lepe Tendwell Properties