Traditional vs. Creative Financing

What is a traditional real estate sale?
Do you want top dollar for your home? We highly recommend talking to a real estate professional, discuss your goals and financial target. Once you have a listing agreement your agent may recommend a few repairs/upgrades in order to reach your financial goal. You will also have showings and open houses; it will typically take 3 to 6 months to get your home into escrow based on market conditions. Once you get a potential buyer you will begin negotiations and reach an agreement. In that agreement you will have a few contingencies including mortgage, appraisal, and inspection. Within the contingencies time frame your buyer can renegotiate terms and prices, or not preform if the properties is not up to par within the given period. Once it is completed you will close escrow and pay closing costs, realtor fees, and capital gains, and any remaining mortgage balance if applicable.

What is creative financing in a real estate transaction? 
Looking for a quick off-market sale to avoid the headaches of listing to the general public? No realtors, no closing costs, no repairs etc. Once we gather more information about your property and your goals our team can structure an offer based on what is important to your whether it is terms or price. We want to make it an easy transaction and create a win-win solution for both you and our team. Doing it this way we can cut out lenders, agents, and net you more money on your property. There is no obligation, but let's get into contact and see if we can figure something out for you with a cash, subject to, seller financing, or a hybrid offer. 

What is subject to? 
In a subject to, sometimes called a subject 2 deal, the existing financing that a homeowner has setup is taken over by an investor. This route is basically paying for the mortgage already in place through an agreement with a homeowner.

Why Would a Seller Agree to a Subject-To?
Most sellers that agree to a subject-to deal are in some sort of distress. They may be behind on their mortgage payments and facing foreclosure, or they need immediate cash due to some sort of personal distress such as sickness or divorce. For example, suppose the seller took out a mortgage for $200,000. They had paid $150,000 of it before they decided to sell the home. The new buyers would then make payments on the remaining $50,000. Under a subject-to agreement, the buyer continues making payments to the seller's mortgage company.

What is seller financing?
Seller financing is a type of real estate agreement that allows the buyer to pay the seller in installments rather than using a traditional mortgage from a bank, credit union or other financial institution.

What are the benefits of seller financing for the seller?
The advantages of seller financing usually includes selling faster and without having to make costly repairs that lenders typically require. Also, because the seller is financing the sale, the property may command a higher sale price. For example, if the purchase price is $5,000,000 and the seller is willing to finance 50% of the purchase price, the buyer puts down $2,500,000 and makes monthly payments on the remainder until the remaining balance of the seller note is paid in full.

Want an all-cash offer? 
Reduce contingencies, all-cash offers don't require an appraisal because there's no lender involved. A cash offer is an all-cash bid, meaning a homebuyer wants to purchase the property without a mortgage loan or other financing. These offers are often more attractive to sellers, as they mean no buyer financing fall-through risk and, usually, a faster closing time. For sellers, the biggest perk of a cash offer is the surety it comes with — particularly in a volatile rate environment. Mortgaged buyers just come with more risk than cash-backed ones. This can appeal to a seller who is looking to move fast and wants to avoid their next mortgage payment.