Owner Financing

[Ciera Calhoun]

I recently read in a book that a guy purchased a home directly from the seller and the seller provided owner financing. My first thoughts were "why would a seller offer this service?" and I have yet to figure that out. It seems like the only reasons a seller may offer this is to service a buyer who may be unable to get approved by a lender... or maybe they are charging a higher interest rate(more than likely).

Have any of you ever been involved in owner financing? Whether you were the buyer or the seller. If so, how was your experience and would you recommend this?

[John C.]

Hi Ciera,

These are some of the reasons we offer owner financing:

1) Taxes (taxes in installment sales are paid as you go not all at once).

2) Higher price.

3) Compete in a buyers market. People are buying the terms as well as the property. Also a lot of people have some cash stowed away right now but cannot get a bank loan for a variety of reasons.

4) Higher interest rate.

5) Since it's usually just us, the seller, and the closing attorney it's a whole lot simpler. No last minute lender hoops to jump through since we are the lender.