Seller Financed Real Estate Deals in Today’s Market Conditions

01Jul10

With stricter banking regulations because of fluctuating economic conditions and an unsteady real estate marketplace, real estate sellers today are carrying back private funding to make their property more salable.

Over the past two years, the central bank has conducted several in-depth surveys of U.S. banks. The most recent survey of 55 U.S. banks’ current lending practices and standards revealed that the percentage of banks reporting tighter standards is near historic highs. One of the Fed’s survey’s, found that about 75% of the banks surveyed indicated they had tightened their lending standards for prime, subprime and commercial mortgages. That was up from about 60% in the previous survey.

The Fed’s July survey covered 52 U.S. banks which hold about 80% of the residential mortgages on the books of all commercial banks. The Fed survey found that only seven of the banks said they were still participating in subprime mortgages, loans made to borrowers with weak credit histories. Of those seven, six said they had tightened lending standards on subprime loans with only one saying it had left standards basically unchanged.
Any experienced private lender recognizes this as an opportunity to salvage an unfavorable situation and turn it into a positive one. By utilizing seller financing, sellers can sometimes end up getting more money for their property and collecting interest on top of that.  Seller financing can enable homeowners to receive the best selling price despite bad lending conditions. In addition, a home buyer with poor credit is able to become a home owner. It’s one of those rare situations where everyone at the negotiating table gets what they want!

Many real estate sellers never consider seller financing because they don’t understand the advantages or the process. There are also common misconceptions that it’s much too complicated to attempt to put together a seller financed deal, or that there are no buyers willing to sign a private loan. Not true! Once a seller takes the time to learn about the basic process and the advantages of offering private to sell their property, the benefits become very clear: bigger buyer pool, easy loan approval process, and a much quicker closing. Plus, a little education about seller financed loans will make it apparent that drafting a secured private loan is actually a very straightforward process.

The bottom line is seller financing can enable a real estate seller to get the best of both worlds: selling at the desired price, closing the deal quickly, and even receiving additional income from interest payments that the buyer makes.  If you decide to seller finance your real estate to procure a sale, come visit NoteFlo or call us at (888) 487-9990 to post your loan for sale for free or learn more about the private lending marketplace.

NoteFlo is a Private Loan Marketplace that allows people looking for real estate loans to directly connect with thousands of private lenders across the country, all for FREE Due to the recent lending constraints placed on banks, qualifying for a real estate loan has become harder than ever. NoteFlo is here to help by allowing borrowers to easily input their desired loan terms and property information so their funding requests can be viewed immediately by our nationwide network of private lenders.  Come visit us today or call Eric Wohl at (888) 487-9990 x3 for more details.

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