Selling a house can be a daunting task for sure, especially when the market is unpredictable. And we all know that our current market is making some heads spin! When mortgage rates are so high it can deter buyers to place offers. This is where owner financing comes in. Owner financing is a type of real estate transaction in which the seller acts as the bank, allowing the buyer to pay a down payment, and then make monthly payments to the seller over a period of time. This option is NOT for everyone. But for some its an incredible perk. As always, make sure to get guidance from you CPA, attorneys, and anyone else on your team that can answer any questions you may have. In this blog post, we will discuss 4 generic things you need to know about selling your Orlando house with owner financing.
1. Owner Financing Can Help You Achieve Your Asking Price
One of the main benefits of selling your Orlando house with owner financing is that it can help you achieve your asking price. When you sell your house through traditional methods, you are limited to the offers that buyers are willing to make. However, with owner financing, you have the ability to set your own terms and conditions. This means that you can ask for a higher price for your house and still attract buyers who are willing to make monthly payments.
2. You Can Earn a Monthly Income
Another benefit of owner financing is that you can earn a monthly income from the sale of your house. When you act as the lender, the buyer makes monthly payments to you with interest. This means that you can earn a steady income without having to do any additional work. This is especially beneficial for homeowners who are looking for a source of passive income. Advisors on your team can help you calculate all this out. It is really cool to see that amortization chart laid out for the course of the loan!
3. Owner Financing Can Help You Sell Your House Faster
Selling a house can take months, if not years. However, with owner financing, you can sell your house faster. This is because owner financing makes it easier for buyers to qualify for a mortgage. Buyers who may not qualify for a traditional mortgage may still be able to purchase your house through owner financing. This means that you can attract a larger pool of buyers, which can help you sell your house faster. This also puts YOU in charge! And who doesn’t like to be in charge?
4. Owner Financing Can Provide Tax Benefits
Owner financing can also provide tax benefits for homeowners. When you act as the lender, you can spread out the capital gains tax over the life of the loan. This means that you can avoid paying a large lump sum of capital gains tax when you sell your house. Additionally, you can also deduct the interest that you earn from the sale of your house from your income taxes. This is by far my favorite perk of owner financing. Your attorney will be able to explain in further detail and cater it to your personal financial goals.