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TEMPORARY SELLER FINANCING |
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It is a well known fact that owner financing sells properties fast . . . especially with properties or prospective buyers that do not conform to traditional lending / mortgage requirements . . . but until now the big problem with this approach has been that the typical property seller does not want to collect monthly payments . . . and needs / wants to cash out at closing . . . to pay off the existing mortgage, to cover all closing costs, to purchase another property, or for any number of other reasons. Sellers need cash!
We have eliminated that problem! You now have access to our unlimited
funds and can use our unique Temporary Seller Financing strategy to sell
a property at top price, and still generate cash at closing!
Basically, you (seller) set the sales price (should be the appraised value) . . . get a down payment, and create a 1st Mortgage Note that my investors will purchase for up to 85% - 95% of face value (depending on LTV, credit of buyer, and rate / term of note), at, or right after, the closing! . . . and I will be happy to help you and your buyer through the entire process.
It's really quite simple! Essentially, you . . .
(1) Advertise "Owner Will Finance . . . No Points! No Bank Qualifying!" , This will attract many more prospects than the traditional approach.
(2) Set the sale price equal to the appraised value. At this point, seller pre-determines, based on their needs , the seller-financed deal that will be offered (i.e. Sales Price / Down Payment / 1st Mortgage Note seller will create / Terms, etc.)
Example: Sales Price (appraised value) = $100,000. The deal that might be offered: 10% down ($10,000) and a 90% First Mortgage Note ($90,000) @ 10% interest for 360 months. Monthly payment would be $789.81 (P+I). Remember . . . we are going to buy this note for approximately $82,500 . . . add the down payment and seller gets a total $92,500 . . . less normal closing costs to cover appraisal and title work.
From this point forward, there will be little or no negotiation with any prospective buyer. You are offering the financing, which the buyer can not get elsewhere, so you are in control. Remember, this may be the only way the buyer can purchase a home, so they too appreciate this strategy and are eager to cooperate.
3.) Receive / screen calls from the Ad . . . show the property to three - four prospective buyers . . . position the seller- financed deal that is being offered . . . get the interested buyers to complete a 1003 Credit Application and an Authorization to Release Credit Information
4.) FAX me the completed Credit Application(s) + an Authorization To Release Credit . . . we will review buyer's credit information; get them pre-approved; and help determine the best prospect to sell to. Our investors are much more lenient regarding credit issues than traditional sources and with a 575+ FICO score we can get most people approved immediatley.
At this point, based on the buyer's financial information and the structure and terms of the note, we can determine the exact value of the note and make a firm purchase offer.
5.) Seller and buyer sign a Real Estate Purchase Contract . . . everyone agrees on the structure and terms of the note to be created . . . and I provide seller with a contract to purchase that note at, or right after, closing. We use your choice of a local title company, or closing agent, and they take over from there. We work with them to create and collect all the required documents and set a closing date.
6.) At closing, seller creates and then simultaneously sells / assigns the mortgage note to our investor. The buyer's down payment . . . plus the funds that will be wired . . . are used to pay all closing costs. The seller collects the balance of the funds. The buyer will then start making their payments directly to our investor. It's a done deal!
It is important to note that our investors are not lenders and can not create or originate loans. They only purchase existing mortgage notes and that is why the seller will use Temporary Seller Financing to first create the note and, in turn, sell that note to our investor. Again, this is all done, simultaneously, at the closing table.