With changes in the economy that we’ve seen in recent years, many homeowners are discovering that there are new ways to sell their homes that weren’t available before. You no longer have to sell through an agent – you can sell on your own or you can even accept seller financing. If you’re wondering how to sell a house by owner financing in TX, keep reading this blog post, and we’ll walk you step-by-step through the process…
So what is owner financing anyway? Owner financing is when a seller offers to sell their home to a buyer and offers to finance the property. So instead of the buyer getting a traditional loan from a bank, they will get their financing from you. And if a buyer comes to you and wants to buy your home, but they’re unable to get a loan for whatever reason, you might opt to finance the property to them where they will make “mortgage” payments to you with interest. However, there are some important things you should know before considering this option. Check out the steps below…
Step 1. Determine whether you own the house outright or still have a mortgage
In some states, if you have a mortgage on your home, you may not be able to offer owner financing (but you can in some states). So the first step is to determine whether you have a mortgage or not. If you don’t have a mortgage, then obviously the process will be less complicated.
Step 2. Talk to a real estate attorney for help in crafting an agreement
With seller financing, you are essentially acting like a bank. The buyer will pay you a down payment and then pay you regular monthly payments until the house is paid off, and then it becomes their house. So make sure you talk to a real estate attorney to make sure that you’re protected and obeying all federal, local, and state laws while also protecting yourself! (If you need the name of a good real estate attorney, get in touch with us and we can make an introduction.)
Step 3. Market your house online and offline
Once your paperwork is in place, then you’re ready to advertise that you have a house for sale. Be sure to let people know that you offer seller financing. This option may be very appealing to certain buyers, so make sure that you get the word out. There is no limit to how much marketing you should do – the more you can do, the better.
Step 4. Work with potential buyers
As your marketing captures the attention of potential buyers, work with them to show them through your house. When someone makes an offer on your house, negotiate the price and terms with them and find the middle ground that will ensure a win/win situation for both parties. Sign the papers when you and the buyer reach an agreement.
Step 5. Collect the down payment and hand over the keys
Once you agree on a price and have signed the papers, collect the down payment and hand over the keys. In most situations, you will continue to own the house and collect payments until the house is paid off, then ownership transfers to the buyer.