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How to Sell Your House Before the Tax Credit Deadline...Part II
The tax credit has been extended until March 2010. There has also been added a credit for some other buyers. The information here can be adapted to many different situations.
Owner financing is a method of selling your home that will get a very favorable response in this market. Because the banks have made their lending criteria stiffer, and do not have lending funds available, loans are harder to get. Owner financing should be looked at as a viable solution for selling now, and in the future.
Qualifying the Buyer
You should use qualifying for your buyer, just as you would for a renter. Many times a person who had a short sale, or foreclosure one their previous residence can still be a good risk. This depends on their present job situation, and whether the previous mortgage adjusted to an extremely high interest rate. There are other factors to consider, but these are a few that can change the affordability to the prospective buyer.
Use a tenant qualifying agency, or get a current credit report from the buyer. A tenant qualifying agency will also give you the option to search criminal records.
Selling if You Are Behind on Payments
If you are behind on payments, this should be fully disclosed to the buyer. If the payments are not so far behind that catching them up is feasible, that should be done. That amount would be considered the down payment, and the payments caught up with the bank. Then the property could be sold "subject to". This is simply taking over the payments on the loans in place, and putting the deed in the new owner's name. If necessary, a trusted third party could be involved to insure that the payments are made, or quick notice if they are not.
Short Selling the Second
At times, in order for the purchase price to be in line with today's values, it may be necessary to short sale the second only. Then take over the payments on the first.
Homeowner Remaining Responsible for the Second
When a second mortgage is taken out on a property after the original purchase it is called a home equity loan, or a retail credit purchase. The loan is secured by the home, but is not necessarily spent on the home. Second mortgagors will often release the second for an agreed sum, but do not release the homeowner to pay all or some of the amount back over time. They will use a promissory note, or a judgment against the borrower to get payment. In a situation of selling the home,and avoiding damage to your credit you should consider selling the home by "subject to", but remain responsible for the amount of the second mortgage.
CLOSING
The closing should be done with a real estate closing attorney who understands different ways of selling. Shop around for one. Attorneys may be up to date on ways of selling, or they may not be. Some will only do things like they are used to.
Okay, now you have some hope to be able to move on with your life, without having the house you want to sell "hanging over your head." Oh, and be sure to be ready to answer those phone calls once you put the ad out that you are offering owner financing.
I am giving any affiliate profits during November and December to the mission project, My Heart For Honduras. Please see the website for further information.
Please leave your comments or questions below.
Owner financing is a method of selling your home that will get a very favorable response in this market. Because the banks have made their lending criteria stiffer, and do not have lending funds available, loans are harder to get. Owner financing should be looked at as a viable solution for selling now, and in the future.
Qualifying the Buyer
You should use qualifying for your buyer, just as you would for a renter. Many times a person who had a short sale, or foreclosure one their previous residence can still be a good risk. This depends on their present job situation, and whether the previous mortgage adjusted to an extremely high interest rate. There are other factors to consider, but these are a few that can change the affordability to the prospective buyer.
Use a tenant qualifying agency, or get a current credit report from the buyer. A tenant qualifying agency will also give you the option to search criminal records.
Selling if You Are Behind on Payments
If you are behind on payments, this should be fully disclosed to the buyer. If the payments are not so far behind that catching them up is feasible, that should be done. That amount would be considered the down payment, and the payments caught up with the bank. Then the property could be sold "subject to". This is simply taking over the payments on the loans in place, and putting the deed in the new owner's name. If necessary, a trusted third party could be involved to insure that the payments are made, or quick notice if they are not.
Short Selling the Second
At times, in order for the purchase price to be in line with today's values, it may be necessary to short sale the second only. Then take over the payments on the first.
Homeowner Remaining Responsible for the Second
When a second mortgage is taken out on a property after the original purchase it is called a home equity loan, or a retail credit purchase. The loan is secured by the home, but is not necessarily spent on the home. Second mortgagors will often release the second for an agreed sum, but do not release the homeowner to pay all or some of the amount back over time. They will use a promissory note, or a judgment against the borrower to get payment. In a situation of selling the home,and avoiding damage to your credit you should consider selling the home by "subject to", but remain responsible for the amount of the second mortgage.
CLOSING
The closing should be done with a real estate closing attorney who understands different ways of selling. Shop around for one. Attorneys may be up to date on ways of selling, or they may not be. Some will only do things like they are used to.
Okay, now you have some hope to be able to move on with your life, without having the house you want to sell "hanging over your head." Oh, and be sure to be ready to answer those phone calls once you put the ad out that you are offering owner financing.
I am giving any affiliate profits during November and December to the mission project, My Heart For Honduras. Please see the website for further information.
Please leave your comments or questions below.
Posted by Kathleen Couch at 11/12/2009 11:20 AM 
Categories: Selling
Tags: tax credit owner finance sell house
Categories: Selling
Tags: tax credit owner finance sell house
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