Price and Terms

Most buyers and sellers go through the traditional methods of getting a home mortgage loan from a financial lending institution. Most people have some money either saved or made from the sale of a prior home to use as a down payment. But most people need to borrow the amount of money it takes to buy a house. Once a buyer has made an offer that the seller has accepted, the buyer needs to get a loan for the agreed upon price of the house. One thing that a seller should ask a real estate agent who calls to make an appointment, is if the buyer had been pre-qualified to afford the house they are viewing. It’s not uncommon for some potential buyers to look at houses out of their price range. This wastes the time of the real estate agent and the seller. In most cases it is not a problem, but being proactive can save a lot of time and disappointment.

There are alternative methods to homeowners who are anxious to sell, who are not in need of the money from the sale of the house, and who sometimes consider seller financing. This type of financial loan can be done by taking on a second mortgage, or even financing the entire purchase if the seller owns the house free and clear. Seller financing differs from a traditional loan in that the seller does not give the buyer cash to complete the purchase. It is in essence, a land contract. Which means the seller replaces the financial lending institution to the buyer. This loan involves extending a credit against the purchase price of the home while the buyer executes a promissory note and trust deed in the seller’s favor. As in loans from lending institutions, they give you the deed to the house, but in seller financing, the seller holds on to the deed, until the buyer has made the last payment. These special circumstances must be acceptable to the seller of the property. After the terms are worked out between buyer and the seller the title or escrow company prepares the necessary paper work. The one thing the seller needs to be sure of if they choose this situation is the buyer’s credit rating. The seller needs to make sure that the buyer can make the proper payments in a timely manner.

There are a myriad of loans that people can qualify for, all with different terms that suit all needs and circumstances. Make sure to speak to your mortgage lender and real estate agent about what options may best suit you.