What often stands between a buyer and seller match that seems to be made in heaven? Getting a mortgage. With stricter lending rules going into effect in 2014 and 2015, it has become harder for small and mid-size lenders to award conventional loans. Lender profit margins have also dropped in recent years.
As a result, more buyers and sellers are turning to creative financing approaches including lease options, land contracts, wraparound mortgages, and contracts for deed. Otherwise, the seller is forced to lower the property's price in order to find a buyer—something they might not be willing or able to do. Creative seller financing usually gives the seller 50-80 percent of the purchase price upfront and the remaining 20-50 percent over time with interest.
Coordinating the sale
Because these types of agreement are less common, not all real estate agents are familiar with how they work and when they are suitable approaches. As a buyer or seller, your best approach is work with an agent who has experience with seller financing and can bring parties together who will both benefit from this approach.
Like other kinds of investments, creative financing has an element of risk and an increased time commitment for the seller. This makes it especially important to avoid do-it-yourself approaches. As with other types of financing, working with a qualified and knowledgeable realty professional is the best way to coordinate a commercial property sale.
To learn more about seller financing in the Columbus and central Ohio area, talk with a DRK & Company realty consultant. Call 614-540-2404.