Owner Financing - Adding Liquidity To The Property Market

Owner financing provides you a great way to purchase a property or piece of land directly from the seller

. This financing option can help you make great savings, which are not possible with conventional mortgage lending. You can also own a government land through owner financing agreements.

Financing channels, such as banks and financial institutions are designed for normal economic activities and cope well in all related situations. However, the current situation with respect to the property market is a bit complex for average property buyers. It has become difficult to keep the property marketing functioning through available mortgage loan facilities and services. This scenario has resulted in the arrival of more innovative forms of financing methods, such as owner financing.

As known as creating financing, the method allows the buyer to finance the property at interest rates lower than those offered by banks and institutions. In this method, the seller signs an agreement directly with the buyer and receives all the payments. Depending on the agreement, the buyer will eventually either pay the full amount or qualify for a normal loan. However, the buyer only receives the title when the seller has been paid in full. Different types of agreements can be made to facilitate owner financing and their terms can be negotiated easily.

The sellers usually demand a higher down payment as compared to normal mortgage lenders in case of owner-financed land and properties. The down payment may go up to 20% of the entire cost of the property. This is basically done by sellers to protect their own interests and get good amount of cash up front. Most sellers insist on a credit report to check that the buyer has a clean credit record and is likely to keep up the payments. Alternatively, a buyer can demand a credit report from the seller as well, considering the risks involved.

While this sort of sale meets the needs of the current market, it does have few disadvantages for both parties. The seller has to wait to receive the full amount and has to administer the loan. Also, if the buyer runs into financial difficulties, he will be faced with legal action and may struggle to receive the property title.

The property market is in such a dire state at the moment that even the U.S. Government is resorting to owner financing in order to sell of its tracts of land. While the terms of an agreement may not be as negotiable as with other sellers, the buyer has the assurance that the seller will not run into financial difficulties. Properties are being sold at auction with no credit checks or pre-qualifications. Buyers can easily qualify for auctions irrespective of their credit rating or past financial record. Even foreign buyers can qualify and stand the chance to own government land.

At the moment, owner financing is just about the right method to own a property or piece of land. And when its about purchasing government land, most buyers prefer it at any time. This is a great chance for people seeking to buy property to take advantage of an offer which would never be made under normal circumstances. So, make up your mind and purchase an owner financed land today!

by: Tim James

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