What is owner-carried financing and when should buyers and sellers consider using it? To find more about this non-traditional financing option, check out today’s message.
People often ask us what the term “owner carry” means, so we’ll be sharing some details on this financing arrangement today. In owner-carried financing, the seller acts as a “bank” by putting up all the funds necessary to purchase the property themselves.
The title company still oversees payments in this kind of arrangement, though, so sellers can rest assured that they won’t be left high and dry.
“ Owner-carried financing can be a great option, but there are many details to consider before pursuing it. “
This arrangement can be a great option for buyers who don’t necessarily qualify for a traditional loan but still want to get into a home. Owner-carried financing is also beneficial to sellers because it allows them to collect interest that would otherwise go to the bank.
But what if the buyer chooses to sell the home at some point before they’ve paid it off? In this case, they will generally be subject to something called a “due-on-sale” clause, which stipulates that they must pay the remainder of the owed amount to the seller before they can sell the home, themselves.
In short, owner-carried financing can be a great option, but there are many details to consider before pursuing it. If you have any other questions or would like more information, feel free to give my team or me a call or send us an email. We look forward to hearing from you soon.