Seller financing can open opportunities for bothÂ Sellers and BuyersÂ in today’s Real Estate Market.
This North Shore home (MLS# 1004616) isÂ 1 ofÂ 45 homesÂ in MLS offering seller financing
Why is it good for Sellers?
- It simply increases the number of prospective buyers looking at your property. In today’s stricter lending environment, not everyone that qualified for a loan a few years ago can get one today. Some lenders also have restrictions on how many residential properties a person can own, and these restrictions sometimes prevent well qualified investors from getting a loan.
- In addition, seller financing offers the seller the opportunity to free up some equity (via down payment from borrower). There may also be some tax benefits to receiving payments over the course of several years versus all at once (check with your CPA).
- Seller financing is also a great tool for sellers that have products where banks have really scaled back on their lending, such as condotels and vacant land. I sold some land in Palolo earlier this year with seller financing. If you’d like to consider whether or not seller financing is an option for you as a seller, contact me for more information on our Seller’s Services.
Why is it good for Buyers?
- Although seller financing is typically at higher interest rates then banks, itÂ widens the spectrum of properties to consider (thatÂ the banks won’t touch) such as vacant land, condotels, or even condos that litigation, such as the Ilikai.
- It could also open opportunities where a contingency sale may have been difficult, or basically buys a buyer time in order to get their financial picture in check to get conventional financing down the road. Most seller financing has a shorter term than conventional financing as well.
- In addition, it’s also a great product for an investor that already owns multiple residential properties.
This Ala Moana Hotel Condo #3113 (MLS# 1010612) is offering seller financing
One thing to keep in mind, most sellers are going to want some “skin in the game” or money down from the buyer. So, I wouldn’t bank on finding a motivated seller that would offer financing with nothing down. As of today, there are 45 homes, 49 condos, and 28 vacant land listings in MLS offering seller financing.