The concept of financing without banks is simple. Instead of borrowing money from a bank or other financial institution to purchase a home or small business, private individuals become the lenders. Surprisingly, this "new" trend is not so new at all.

 

Seller-financing has been around for ages. The Discount Mortgage business is nothing new. People have been lending money this way for hundreds of years. Think about it! Even before there were banks, if someone wanted to buy a wagon from their neighbor, or even a local merchant, the buyer and seller simply agreed to the price and the terms, and the buyer made installment payments directly to the seller. No bank or lending institution was involved. Today, these simple and effective financial arrangements are making a comeback.

 

Did you know that in the U.S. the sale of most small businesses incorporates peer-to-peer lending, and 1 in 13 American homes is purchased using cash flow notes? Currently, there are over $200 billion in real estate notes in North America alone.

 

Let's take a look at the benefits of seller-financing:

 

MORE BUYERS - When used in a slow market seller-financing is very powerful. By listing your house as "OWC" - Owner Will Carry - you will attract more buyers.

 

MORE MONEY - In addition to increasing the number of potential buyers, you also tap into a unique demographic of buyers who are willing to pay more for a property and you have a greater chance of selling for a higher price.

 

QUICKER CLOSING - Typically, the real estate sale can close more quickly- usually within 30 days.

 

Although the benefits of seller-financing are clearly evident, many sellers still feel compelled to stick with conventional lending because they feel that creating a note is not a viable solution for selling their home.

 

On the contrary, many notes created using seller-financing are quickly sold and the seller ends up with the cash they need.  This means that the net result is almost exactly the same as with traditional lending.

 

The savvy property seller who recognizes this opportunity can actually end up getting more than the original asking price.

 

In summary, creative home sellers who offer seller financing to potential buyers can often sell their houses more quickly (and at a higher price) in a slow market and private financing costs the home seller typically nothing. We usually pay the cost of the credit check, appraisal & title search.