A growing number of home-seekers are looking for properties that offer seller financing. As sellers become desperate to unload unwanted properties, they’ve become more willing to work with prospective buyers in any financial situation. However, properties with seller financing are still few and far between. The majority of desperate buyers have little to no equity (sometimes even negative equity) and can’t offer this option.

So, why is seller financing such a hot commodity in the eyes of prospective buyers? There are several reasons.

First, sellers are often able to offer financing when banks won’t. A buyer with a poor credit history or self-employment income may have better luck working directly with a seller.

Second, buyers are often able to get seller financing before selling their current property. Traditional banks have become more concerned about buyers juggling two mortgages in today’s market. Sellers are often willing to overlook this problem.

Third, buyers think they’re going to get a good deal on a seller financed home. Unfortunately, many home-seekers are  disappointed when they discover that the best deals in real estate don’t come with funding from the seller. Traditional mortgage rates are extremely low right now. Even if a seller is willing to match bank rates, chances are the home price will be overvalued to compensate.

In a nutshell, seller financing is often a smart choice for potential homeowners who cannot qualify for a traditional mortgage. However, if you can qualify through a lender, you’re likely to get a better rate and have access to a much wider selection of real estate.

For more information see: Seller Financing Basics.

Tags | bad credit loans, limited documentation loans, Seller Financing