Real Estate Stockton-http://westbrookrei.com This video discusses seller Financing in Stockton, CA & Tulsa, Ok as way to purchase a house. We offer seller financing with flexible terms tailored to each homeowners needs. We specialize in buying houses
Hello, my name is Peter Westbrook and I am a Stockton Real Estate Investor with Westbrook Real Estate Investments and I buy houses in any condition in Stockton, Sacramento, and Modesto, California and Tulsa OK
Westbrook Real Estate Investments offers Stockton Buyers Seller Financing on some properties.
Seller financing can be a great quid pro quo way to sell a house fast that would otherwise sit vacant in today’s sluggish and glutted Stockton Real Estate market.
Let’s face it; there are more properties for sale on the market today than there are buyers that can qualify for a loan. Gone are the days where someone merely having the ability to fog a mirror can qualify for a conventional mortgage. Banks are turning down loans for people with excellent credit and sufficient income, but because of some other risk factor they deny the loan.
For investors to gamble on the banks continuing to loan money to any particular buyer for any house specifically would be financially disastrous, as the banks are now creating their own rules to tighten the money supply and restrict lending.
Investors in particular are savvy to the ins and outs of owner financing and utilize it on both sides of the transaction as frequently as possible. As an investor, we are currently spending all of our time leveraging most of our available capital to make new purchases while at the same time keeping enough in reserve to fix and sell the last project. The demand for Capital is incredibly high and of course the Investors cash flow is often the victim of timing, etc. our money and assets so that we can reasonably purchase that next house or sell that last home.
Seller financing allows Sellers to offer the most flexible terms to would be buyers and of course it provides them the means to make higher profits (though shorter vacancy rates and hold times) while at the same time work directly with Stockton Home buyers that would otherwise not qualify for a conventional Home Loan.
In Stockton only a few companies offer Seller financing as a way to generate profit margin.
In our case, we offer Owner/Seller financing as a way to increase our visibility as well and it works.
So, while Seller financing allows sellers to move a home faster and get a more sizable return on their investment, buyers also benefit from what are typically less stringent qualifying and down payment requirements, more flexible rates, and better loan terms on a home that otherwise might stay vacant.
What is Seller Financing
Seller financing is when the Seller takes on the role of the Bank, but, Instead of giving cash to the buyer, the buyer gets enough credit to for the purchase price of the home, minus any down payment. The buyer and seller negotiate and sign a promissory note (which contains the terms of the loan). They then record the note as a "deed of trust" with the County and the Promissory Note becomes part of the public record attached to the property.
Seller financing can range from as little as 2 years and as long as 30 years. Typically however the loans are a shorter term in nature. For example, a mortgage can be amortized over 10 years but have a balloon payment due in 2 or 3 years. The theory is that, by that time, the home will have gained enough additional value or that the buyers’ credit will have been improved or repaired to the extent that they can then refinance with a traditional lender.
For the Seller, a shorter term loan is generally preferable because the seller does not want to tie up his capital for extended periods of time for a myriad of reasons:
1. For every dollar that is out on a loan the Sellers access to that money is limited
2. The sellers usually don’t want long term risk
3. Sellers that want to move property quickly can usually negotiate favorable short term loans
Types of Seller Financing
Here’s a quick look at some of the most common types of seller financing.
Full Asking Price Mortgage: In this type of loan, the seller carries the promissory note and mortgage for the entire balance of the home price, less any down payment.
Land contract. Land contracts don’t pass title to the buyer, but give the buyer "equitable title," a temporarily shared ownership. The buyer makes payments to the seller and, after the final payment, the buyer gets the deed.
Mortgage Assignment: A Mortgage Assignment is simply the buyer promising to take over the existing mortgage and make the payments according to their terms. In some circles it is known as a Subject to Purchase whereby the buyer agrees to purchase the house Subject to the existing mortgage remains in place.
Lease option. The seller leases the property to the buyer for a specified term, like an ordinary rental — except that the seller also agrees, in return for an upfront fee, and other credits that get applied to the Buyers account when rent is paid on time, to sell the property to the buyer within an Option period and generally at an agreed upon price.
While it is not required it is advised that both the buyer and seller will hire an attorney to draft and review the documents. It is also recommended that the transaction be recorded at the county and that the transaction make use of a Title Company to assure the Buyer and Seller that the Seller has legal authority to sell the property.