Why offer seller financing when you sell? A higher price, a lovely return on your money, a faster sale & to sell a property that is otherwise difficult to sell. Some lovely reasons, but how do you do it safely?
1. Check their credit. Have them pay for & bring you a credit document. Bad credit may be all right, but type of bad credit is important. Unpaid hospital bills they are disputing are not as relevant as unpaid loans.
2. Get other security. If they need it with small down, & you like the return you'll get, make it safe by putting a mortgage on other property the buyer owns, to be released when they have paid down the balance to a definite level.
3. Think about the whole picture. Suppose a bank will loan 90%, & is all right with you taking back a $5,000 second mortgage, allowing the buyer to get in with what money he's. If you are getting $6,000 over you expected by accomodating the buyer's needs, where is the loss? You are all right if he never pays the $5,000, right?
4. Trust your instincts. If you are usually right about people, give some weight to your judgement of their character. I'd trust a man who felt morally obliged to pay his debts over a playboy that happens to have decent income at the moment.
Offering seller financing makes it not as hard to sell, & to receive a higher price. be safe about it. Have a real estate lawyer review your paperwork, & use the tips here.
5. Talk to a lawyer. Perhaps in your area it takes two years to receive a foreclosure on a mortgage through the courts, & only five months to foreclose on a "contract for sale." Knowing these things can help you sell in the safest way.
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