I have a win/win solution that can make impossible deals possible? You want to hear it? When the availability of mortgages tightens and interest rates rise fast as they did, loan approvals become more really difficult to get which means the buyer pool lessens and sellers can’t get their price and can’t get their home sold. I always say when there’s a will there’s a way!

For those sellers that aren’t able to get their price or catch a buyer to buy and for those buyers who want to buy but can’t qualify for the full purchase price are you ready to make a deal?

Seller Carryback Is Back and here’s the how and what you need to know!

Seller financing is when the seller allows the borrower to borrow from them instead for the amount that they are short on the purchase price. Say for example Mary buys a $1,000,000 property from Bob. Mary only has $200,000. Instead of lowering his price to $800,000 which Mary can qualify for, Bob can offer Mary a seller carryback loan on his property. This way they both get what they want with creative financing and it’s a win win.

Benefits for the Buyers:

• They don’t have to be capped to the bank’s restrictions and qualification requirements

• They get the home that they want

• They can negotiate more favorable terms such as interest rate better than they can with the banks which can offset the price

Benefits to Sellers:

• Their money is protected with a first trust deed and mortgage just like any bank would record against the property

• They know and believe in the value of their home and they are in 1^st position in case the buyers default

• If the buyers default, they get their home back and they’ve made interest in the meantime

• They don’t get all the proceeds to the sale at once like most sellers do so there is a significant tax benefit- In fact, the seller earns interest on the portion of the note principal (that’s the amount the buyer borrowed) that represents the tax not yet due and payable. So, while you’re deferring taxes, you’re also making passive income

Remember qualified buyers are willing to pay a higher price for real estate when attractive financing is available. This holds true whether the financing is by the seller or by the banks. The banks had a good run, now its time for the sellers step up.

If you are looking at the option of selling a home in the San Francisco or Peninsula in the near future, please reach out to us.