Selling Your Home With A Payment Plan
Selling property using Vendor Finance is an age old concept which is becoming more popular as house prices rise and deposits are harder to save.
How Does It Work?
The concept is easy – instead of the home buyer getting finance from a bank or building society to buy a home, they start making repayments directly to you, the owner, way before a bank even gets involved.
The Completion
At some later date when the buyer has paid some of the home loan off, the buyer organises a mortgage with the bank and pays you the balance they still owe.
Transferring to a bank loan is a refinance rather than a new loan, which is generally easier to get, especially if the buyer provides a good payment record to show the bank.
Typically a bank will consider a refinance if a buyer has a good payment record with you for 13 months or more.
How Does It Benefit You?
If you need or want to sell a house, using Vendor Finance techniques exposes your home to far more buyers than selling in the ‘traditional’ way. If 30% of the market can’t get a bank loan, these people can’t use the traditional way. That means you are only marketing your home to 70% of possible buyers.
With Vendor Finance you can sell your home for a better price because you are not competing with other sellers in the market on price. Furthermore, you are not paying expensive real estate agent fees.
How Does It Benefit the Buyer?
There are many home buyers who can afford a home loan but can’t get one for various reasons, most commonly it is not enough deposit. For example, if a Bank wants 20% deposit on an average home of $300,000 the buyer needs a deposit saved of $60,000.
If buyers don’t have that kind of savings, sometimes Vendor Finance is the only way they can get out of the rental market.
This means that they are often highly motivated buyers, keen for an opportunity to prove that they are capable of buying a home. All they need is a foot in the door to get them started.
How We Can Help
If you are a home owner and you need or want to sell your home, and the traditional method has not worked for you, give us a call and we can discuss the best solution to your situation, and what alternatives are available to you.
We are very experienced in all facets of Vendor Finance and would love the opportunity to assist you.
Call Drew on 02 4981 8833 or submit your details on our contact us page.
