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Benefits of Owner Financing 

Jennifer Lovett

More Jennifer's articles

3 min read

Seller financing, also known as owner financing, is a great option for both buyers and sellers in the real estate market. This type of financing allows the seller to act as the lender, providing the buyer with a loan to purchase the property. In this article, we will discuss the benefits of an owner selling their house with seller financing.

One of the main benefits of seller financing is that it can help the seller to sell their property more quickly. When a property is listed for sale with traditional financing options, it may take longer to find a buyer who is able to secure a mortgage from a bank or other lender. With seller financing, the buyer does not need to go through the traditional lending process and can purchase the property more quickly.

Another benefit of seller financing is that it can help the seller to get a higher price for their property. When a property is listed for sale with traditional financing options, the buyer may need to pay a down payment and closing costs, which can reduce the amount of money they have available to purchase the property. With seller financing, the buyer may be able to purchase the property with a lower down payment and without having to pay closing costs. This means that the seller can ask for a higher price for their property.

If the seller is selling a rental property and has not lived in the property 2 of the last 5 years then they will be subject to capital gains tax on the sale.  If this is the case then selling with owner finance will be a huge help. Instead of selling the house and getting a large lump sum and having to pay taxes on that large lump sum, the seller can spread out and reduce the tax burden especially if the sale would push the seller into a higher tax bracket.  Please consult with your CPA to help assist with any tax strategy.

In conclusion, seller financing is a great option for both buyers and sellers in the real estate market. It can help the seller to sell their property more quickly and at a higher price, while also providing more flexible terms for the buyer. Additionally, it can also provide a steady income stream for the seller. If you are considering selling your property, consider offering seller financing as an option to potential buyers.

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