Only a small percentage of homeowners are willing or able to offer seller financing. Here’s what to keep an eye out for:
Established Neighborhoods –Since the late 70’s, most mortgages have “due-on-sale” clauses that make it difficult for homeowners to offer seller financing. You may have a better chance of finding seller financing if you seek out homes in established neighborhoods where many residents have owned property for twenty or thirty years.
People with VA or FHA Loans – Mortgages offered by the Federal Housing Administration or Veterans Affairs must be assumable. Seek out sellers with these loans and you’ll be more likely to find financing.
Desperate Sellers – Struggling homeowners are more likely to enter into seller financing arrangements. You can help a homeowner get out of a difficult financial situation and he can help you purchase home. It’s a win-win.
For-Sale-By-Owner Signs – These signs show that sellers are willing to color outside of the lines. A for-sale-by-owner sign doesn’t mean that seller financing is available, but it does indicate that the homeowner may be more willing to negotiate.
Where can you find these seller financed deals? Give the following possibilities a try:
MLS Listings – Have your agent check the listing notes for buzzwords such as “owner will carry,” “seller financed,” “seller carry back,” “no banks.”
Craigslist.com – Run your own local searches for the preceding buzzwords. Be aware that scams are out there – you may have to sort through annoying ads to find the good stuff.
Specialized Real Estate Agents – Not just any agent will do. Try to find an agent who specializes in seller financed deals and ask him to show you those properties exclusively.
Specialized Mortgage Brokers – A mortgage broker who deals with FHA and VA loans may be able to offer some ideas for seller financed opportunities in your area.
People You Know – Don’t forget this step. Asking friends and family members to share possible leads is one of the best ways to find a seller financed deal.
Looking for a seller financed deal will definitely limit the number of properties you can consider. But, with perseverance, most buyers are able to find seller financed homes that meet their needs.