sell your Minnesota house with seller financing terms as-is fast
If you’ve started to run out of options on selling your Minnesota home, or making your mortgage payments, you may find that seller financing is a good final option.
There are investors in Minnesota who either have bad credit, not a lot of money upfront, or own a lot of minnesota homes as seen on their credit report.
The challenge these investors have is that they can’t easily buy a home in a conventional way unless they have all cash, or 20% down with a bank and even then they’ll run into debt-to-income issues after awhile.
Some investors can put together enough money to keep buying fix up repair Minnesota homes if they have the money for parts and labor waiting on the draws from the private or hard money lender.
Other investors in Minnesota like to buy with seller financing with very favorable terms that requires less of their money upfront.
Often the homeowner will get more money than versus an all cash sale. The homeowner can make in a win-win solution for both homeowner and investor buyer.
The type of investor who buys a lot of seller financing homes will buy more in a recession or going into a recession like we are starting to see now.
These deals can get very creative and make sense to a homeowner who no longer has time to manage the property.
Here is an example:
Let’s say as a homeowner you are 60 days late on your mortgage, or getting a divorce, or moving out of state, or the house needs carpet and paint before listing it on the market.
This sounds like a big hassle to the homeowner and they don’t have time to deal with this house headache.
Let’s say you all agree that the home is worth $225000 fixed up and you subtract $15000 to account for the carpet and paint. Now you ate at $210,000.
Let’s say an investor says that you’d normally have $20,000 less after listing commissions and closing costs, so let’s call it $15000
So $195000 is the price you agree on instead of waiting many months and time to arrive at the same conclusion.
But the investor doesn’t want to make the 1st payment for 60 days, so that he/she can find a rent to own buyer. Then the investor will get $5000 option money to keep upfront for their time invested
Then the investor will rent out the property for $200-$300 month more than the mortgage payment.
If your bank financing is a low 3-4% fixed interest rate they will have more interest in buying, or taking over your payments.
Since the investor paid you a reasonable price vs. way less then with a cash buyer’s offer, they wouldn’t put money down. They would wait 60 days to make the first payment.
The investor would sell the house to the rent to own buyer for more, and hope to make more money with cash flow monthly.
The upfront option money would also be another reason the investor would be interested in buying. The investor would have to guide the rent to own buyer with credit repair or how to qualify for a loan.
How the investor takes ownership with title will matter also
As recession grows sell your Minnesota home as-is fast
As the recession heats up we will have too many rent to own opportunities ourselves, and no money down contract for deeds we will look at if the monthly payment allows cash flow.
Check with your accountant if selling on a contract for deed is beneficial for you on taxes as an installment sale.
The more advanced investors with decades of experience that I know would be most interested in buying your home ‘subject to’ existing financing meaning that they would get the warranty deed in the investors name with a closing at the title company.
This will help with control as it relates to selling on a contract for deed in the future.
The ‘subject to’ method will be more likely the only way to buy the more options of homes, certain situations like divorce or needing two spouse signatures, aging health concerns of the homeowner, or concerns of liens on the property.
Advanced investors will likely use a land trust with the warranty deed with subject to and that would be explained to you before the closing takes place.
Adjustable rate mortgages, houses that need a lot of fix up repairs, houses with way below market rent, homes past the sheriff sale in foreclosure, non marketable title, homeowners in bankruptcy, probate, are all situations that are more custom.
These will take a lot more discussion to come up with a solution as seller financing may not be best for some of the above situations.
If your house didn’t sell, if you are frustrated and stuck with a vacant home, if you can’t handle the monthly payments and you are quickly going broke then now is the right time to hurry and sell with seller financing.
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