Let’s face it. Not every home or property will qualify for an auction for various reasons. On several occasions when meeting with a potential client, the situation dictated another means of getting the home sold other than an auction. Well… what are some of those other options or methods?
(1) First of all, there is the traditional method of listing the property with a real estate firm. We have done this on several occasions for a client. There are advantages and disadvantages in using this method. Each property has to be evaluated to determine if this is the best route to take.
(2) Secondly, you may consider a lease option agreement. In this scenario, a potential buyer puts down a good down payment and signs an option agreement. A separate lease agreement is signed by the seller and tenant/buyer. Under this method, the seller is “cashed out” at a later date as listed in the option agreement.
(3) Or the owner could create seller financing for the buyer. Sometimes this is called a wrap around mortgage. The seller financing program is set for a limited period of time so the buyer will eventually get financing and cash out the seller.
(4) Agreement for Deed is similar to seller financing with different tax consequences.
(5) The seller could sell with “seller financing” but rather than wait a year or more to get cashed out, he could sell the note at closing for, say for example, 93% of the notes face value.
(6) In rare situations, we have seen a seller get the buyer to get a loan for 80% of the agreed sale price and then the seller accepts a second mortgage for the difference at a higher interest rate. As you can imagine, there are risks involved.
If was not my purpose to write a treatise on each one of the above options. I am sure there are a few other creative strategies out there. But if you have having difficulty getting your property sold, give us a call at 252-257-4822 and let’s discuss your situation to see which option is best for you.