Seller Financing Your House In Kentucky
Do you own a home that you no longer want? Maybe you have built up a ton of equity, but you would like to sell quickly. On the other hand, since you’ve got a lot of time and money invested into your home, you want a great price. We don’t blame you! You should get a great price on a home that you’ve loved and maintained! Consider seller financing in Kentucky. There are pros and cons to this strategy, but in our minds, the benefits far outweigh the cons. Your buyer will make the deal and we’d love to be considered a candidate if you’re interested in seller financing your home in KY. Let’s discuss it!
We buy seller financed houses in Kentucky and we’ve encountered many homeowners that like this option. To start out, let’s look at what seller financing means.
Seller Financing is a real estate agreement in which the seller handles the mortgage process instead of a financial institution. Instead of applying for a conventional bank mortgage, the buyer signs a mortgage with the seller. Owner financing is another name for seller financingInvestopedia
This can be a great strategy for the buyer, but more importantly for you as the seller. Seller financing is good for the property owner for a multitude of reasons.
Pros Of Seller Financing
Seller Finance To Avoid Banks
As the above definition above outlines, when you seller finance your home, you are acting as the lender. Rather than making the buyer go out and find financing by getting approved with a lender or bank, you can offer that. Banks and lenders have stringent vetting processes that can take weeks or sometimes months! Worse than that, sometimes a buyer will go through the entire process with a lender only to be denied the approval to make a certain purchase. When you offer owner financing you can sell your home on your own without counting on a bank’s approval for your buyer.
Offer Owner Financing For Speed
As discussed above, banks can really slow down the process of selling your home. Not only are they required to abide by government lending laws, they also are stuffed with bureaucratic policies that slow down the entire process. When you are acting as the lender and financing the purchase for your end buyer, you can make the judgement calls and work as quickly as you want to close the sale. When it’s your property and you’re the lender, you are in control and you can push a sale through much quicker than counting on third parties.
Owner Financing In KY To Safe Money On Taxes!
When you sell a home for cash, you essentially are done with the investment. This is great as many would prefer this route. However, when you do seller financing in Kentucky, you get the perks of holding on to the investment. Most often when you’ve owned a home for years, the land has appreciated. With this in mind, the buyer is usually purchasing the home for more than you purchased it. When you sell a property for more than bought it for, you are subject to pay capital gains taxes (unless you’ve lived in the home 2 out of 5 years – ask your CPA about this fantastic law). When you hold on to the investment you no longer have to worry about capital gains taxes as you did not sell the property and you are still the owner. You will be the true owner of the property until the buyer has fulfilled all payment requirements as listed out in your agreement.
Sell Your House For More By Seller Financing In Kentucky
However, when you do seller financing in Kentucky, you get the perks of holding on to the investment. For one, you can require the buyer to put down a sizeable down payment on the home. On top of that you can create your own terms for the agreement. The particularly great part about owning the deal is that you are the bank. Therefore, you create the terms. You can design the payment plan, the interest rate and the required down payment. You can get paid now (down payment), each month (rent), and your money works for you (interest). There really are three profit centers here. And when you offer owner financing the buyer is inclined to maintain the property because it will be theirs in the future when they satisfy the loan terms.
Cons To Seller Financing
When you offer seller financing on your home, you are still involved in the interest of the property. Technically, until the loan terms are satisfied the property is still yours. You certainly want to get your money out of the property and you’ll want to ensure the property is well kept as it holds your equity. It’s not hard to partner with someone close by, potentially a neighbor to keep you up to date on the property if you move far away.
Foreclosure Rather Than Eviction
When you sell a home to a buyer and they have money invested into the ownership of the property rather than renting they have an “equitable interest” in the property. If the buyer stops submitting payments to you for whatever life occurrence, it is more challenging. In this case you cannot simply evict the tenants. Since the buyer has an interest in the property they have a partial ownership. This means that you will be required to go through the foreclosure process in Kentucky. Since Kentucky is a Judicial state it means that the courts have to get involved in sorting out property ownership rights and legal proceedings. This can go quickly or drag on depending on the courts and your documentation. However, the courts will reason with the rightful owner based on the agreement. If the buyer isn’t submitting payments then they will eventually be removed from the property if they cannot meet the loan terms. You’ll need an attorney to guide you through the entire process, but it will be well worth it.
Conversely, once you complete the foreclosure and evict the buyer, you can re-sell the property to the next buyer. This is unfortunate as you go through more work, but this is why we encourage a larger down payment ($10,000-$20,000). This provides you with cash up front and motivates the buyer to fulfill their end of the agreement. In this scenario, you get to sell the house multiple times in addition to the payments that you receive along the way.
Before you start thinking about ways to give your unwanted property away and move on, consider selling to a buyer with a proven track record and retain your stored equity.
Who Buys Seller Financed Houses In Kentucky
To many, an unwanted home in Kentucky is an added burden that becomes their problem at the time they inherit it or time of purchase. Many bite off more than they should. It’s understandable though. There are many things that can allow you to inherit a property or own one that made sense at one time, but since has become a burden. Buying a house is a big investment for the average person. The up-and-coming generations prefer to rent rather than to own. It makes selling a home hard to attract the right buyer that can afford it. Whether you hire a realtor or list your home in Kentucky on your own, it’s a big undertaking.
Believe it or not, there are actually individuals and companies that prefer to buy seller financed houses in Kentucky. It may sound far fetched, but real estate investors and “cash for houses” companies purchases large houses all of the time. They specialize in sprucing up big properties and bringing them back to their former glory. These companies flip properties regularly and they are not afraid of buying large homes or ones that need work. If you’re not interested in doing all of the hard work, managing renovations and paying for the expensive repairs, then offering seller financing for your big house in Kentucky to a compay (like our company: We Buy Property In Kentucky) is a great way to get cash for your house upfront, take advantage of the tax laws, get future payments & move on with ease! We’ll pay you more than the average buyer for your home and take care of it! You make the terms and we’ll take it from there!