Technology and creative selling have developed further in recent years. A number of companies can buy your house for cash, but even fewer can do something more creative, called owner financing (or seller financing). You no longer have to sell through an agent – you can sell on your own (For Sale By Owner) or you can even accept seller financing. If you’re wondering how to sell a house by owner financing in Virginia , keep reading this blog post and we’ll walk you step-by-step through the process…
Step 1. Determine whether you own the house outright or still have a mortgage
This is the first step. In most cases, you would already know whether or not you owe mortgage on your house. If the house is paid off, or you owe a small remaining amount, you will be able to do an owner-financing deal with a buyer, providing they can cover the remaining mortgage balance (if any) in full.
Step 2. Talk to a real estate attorney for help in crafting an agreement
In a seller financing type of deal, in essence you are financing the deal, so you act as the bank. The buyer will start paying you monthly payments until the house is paid off, at e previously determined monthly payment amount. These amounts and total price is determined simply by negotiating with the buyer of your house. It is also essential that this is handled by an attorney to make sure all sides are protected and all documentation is completed properly. You do not have to know all the legalities, as long as you get all of your questions answered by the buyer and/or an attorney. These deals are usually done between you (the seller) and a company that is experienced in doing such deals, usually also cash home buyer, like Coastal Edge Homebuyers. If you call us, we’ll be happy to explain the details on such a deal.
Step 3. Market your house online and offline
Once your paperwork is in place, you are ready to advertise that you have a house for sale. Be sure to let people know that you offer seller financing. There is no limit to how much marketing you should do – the more you can do, the better.
Once you have your questions answered, you can advertise the house online and offline (street signs). If you want to bypass this part, you can call a cash home buyer company (such as Coastal Edge Homebuyers) and get an offer for a seller financing deal. Such offer will usually be higher in total value than a lump sum one-time cash offer on your house.
Step 4. Work with potential buyers
This is the part where you would show the house to potential buyers. It works much like when you work with a real estate agent where they will be showing the house. You would just show the people the house inside and out and negotiate with them the terms. This is a completely negotiable deal. There are no rules about what the numbers should be. If you have some numbers in mind, you can propose them, or you can just ask the potential buyer what they would offer as a total price for the house and the amount of the monthly payments. In some cases, an interest rate can be negotiated, as well as a down payment. If you are happy with the offer, the buyer/attorney will do all the paperwork.
Step 5. Collect the down payment and hand over the keys
Once you agree on a price and have signed the papers, collect the down payment and hand over the keys. In most situations, you will continue to own the house and collect payments until the house is paid off, then ownership transfers to the buyer.
This is the easy part. After closing, you would simply collect the down payment (if any) and hand over the keys. From that moment on, the house (the deed) changes names and the buyer becomes the new owner and they start making monthly payments out to you (as if you are the bank) for as many years as necessary until the total amount is paid off. That’s it!