A Choice Between Lease Option or Seller Financing to Sell Your House Fast Property advertisements come with several ways like lease option and owner finance especially when the real estate market is soft. When this soft real estate market occurs, signalling a buyer’s market rather than a seller’s market, property owners are required to think creatively on how to sell and could consider the mode of concessions. Sellers therefore are becoming creative in their financing solutions to face the tightening credit markets to shorten listing times, entice buyers and compensate for the situation. The first means that sellers are offering is called the lease option where this arrangement allows the potential buyer to both lease or rent the property and have the choice to buy later on the property being rented. Generally, the option money paid by the buyer is non-refundable, but a portion of the rental payment can be also applied towards the buying price.
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Another means implemented by the seller to attract potential buyers of the property is to offer seller financing, and this means that the seller offers to finance the whole or a part of the amount purchased by the buyer. In this means of purchase, which also known as owner financing or instalment sale, the buyer pays to the seller for a period of time rather than getting the traditional mortgage or bank loan as means of paying to the owner.
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Considering what these methods offer, it is also advisable for the seller to check out the pros and cons from his or her point of view. The pros cited in a seller financing method are the usual greater down payment, it is the responsibility of the buyer t pay for the real estate taxes, property insurance and upkeep, and thus the buyer would tend to act as the owner of the property having bought the it already. In this method of purchase, another pro is with regards to the greater liquidity in payments done with private mortgage rather than lease payments, and this will entice more investors to pay for cash now than future payments. The seller earns interest in the amount being financed and this is a good advantage. Compared to the eviction process which is faster and easier, the con in this arrangement is that it will take time for the seller to foreclose once the buyer becomes delinquent with his or her payments. Another disadvantage of this arrangement is that the term of repayment can be longer than a sale based on instalment. With the lease option, the positive side of it are a faster eviction process if the buyer misses payments and that the owner of the property will gain some upside of the value of the property if there is an appreciation of real estate market and if the buyer will not push through in buying the property.
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