Sellers Can Offer Buyer Financing to Sell Home

Posted in the Wall Street Journal today, June Fletcher, made reference to options in how a Seller can assist a Buyer in purchasing a home in today's market. One option was to assist the Buyer with financing. Years ago, Sellers would hold the note on a home for a potential buyer only to be left with the liability of the debt later when the buyer would vacate the property or choose not to make payments. While this is a very good option to assist a Buyer, it is wise to obtain an attorney to assist you in the legal process of writing the note., determing the financing terms and to make sure there is an arbitration clause and liability clause to protect the Seller. As Fletcher also states in her article, it is wise for the Seller to also investigate the buyer's finances just as a bank would to determine if allowing this option to sell the home would be in the Seller's best interest.

As stated in Fletcher's article, the below five steps should be taken:

1. Investigate the buyer by asking him to fill out a Uniform Residential Loan Application.

2. Get bankruptcy details by checking out the case through Public Access to Court Electronic Records (PACER), a service of the U.S. Judiciary. ( This program requires registration and will only charge you for the viewing of the pages you print, so it does require a credit card to use,

3. Pull the buyer’s credit report and eviction and criminal history via the American Apartment Owners Association Web site.

4. Insist on 20 percent down or offer a contract for deed, which only confers full ownership rights after the home is paid off.

5. Consider offering a lease-option with part of the payment going toward the purchase price, which gives the buyer time to repair his credit before seeking conventional financing.

6. And one other area of research that should be done that is not included in the article is to verify past and present residential creditors in addition to pulling the Clerk of the Court Civil and Criminal Records ( which are public record) through the Court's online website to verify there are no lawsuits, liens or criminal activity against the Buyer that would otherwise pose a problem for you as the Seller.

If you are an agent, unless you have authority to do this from the Seller in writing, have the seller do this. The fees for pulling records on one potential buyer, can add up and unless you have a written agreement with your seller to reimburse for the background check or otherwise, the Seller should take this responsbility.

Althought there is alittle more legwork for this option, it is still a great option to assist a buyer in our current market.


Source: The Wall Street Journal, June Fletcher (08/28/2009)© Copyright 2009 INFORMATION, INC. Bethesda, MD (301) 215-4688
Additional information provided via Dawnmarie Hatfield, TRC, AHWD Realtor/Keller Williams Realty.