Why Sell Your Property Creatively?
Many have heard of creative finance strategies, but perhaps they do not know when and why they may be a good solution.
Top Reasons to Sell Creatively:
- 1. No equity
- 2. Low equity
- 3. Bad condition
- 4. Too high of asking price
If you have no equity in your property, you may be facing the painful reality of having to pay to walk away from your asset without a creative solution.
If you have equity in your property but are not getting the "price you want," you have a few options. 1) Wait and be patient for your buyer to come. 2) If you've waited and still can't sell, you can get practical and reassess your asking price. The traditional market is already telling you it is not worth what you're asking. 3) Sell your property creatively.
Creative Strategies Can Include:
- 1. Selling subject to the existing mortgage
- 2. Seller financing the property if there's no underlying mortgage
- 3. Hybrid: a combination of the underlying mortgage note + a seller carryback 2nd position note on the property
Risk Mitigation Strategies:
If you are selling subject to the existing mortgage or hybrid, you should "wrap" that note so you are the note holder for the entire mortgage and have that note serviced for monthly payments.
Hire due diligence services to qualify your borrower for verification of their ability to pay regardless of how good of a salesman they are.
Always work closely with real estate attorneys and title companies for any exchange of funds in the escrow process.
Consider selling on land contracts so you are still the owner and do not need to undergo painful foreclosure processes if your buyer fails to perform.
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