You wanted to talk today about buying a home on a real estate contract, can you tell us what that is?
The first thing to know is that we call them REC's. A real estate contract put simply is a way for the seller to act as the bank for the buyer. In other words, the seller is, in effect, lending all or a portion of the purchase price for their property to the buyer and accepting monthly payments, including interest, over a period of time.
Does the buyer have to qualify?
The buyer does not have to qualify, however most sellers will review the credit report. It is much easier than qualifying for a mortgage and many sellers will take a chance on someone with poor credit, especially if they have a good explanation.
Why would a buyer want to buy on a real estate contract?
For a buyer with little, bad, or no credit, it may be the only way they can purchase a home. It may not be a credit issue. They may be self-employed or in a new job, or other reasons that make qualifying at the bank difficult or impossible. Another reason is that the terms and the down payment are negotiable between buyer and seller. And since you are buying the house you get the tax deduction for the home ownership.
Sounds a little complicated, have you done a lot of these real estate contracts?
Yes, I have, both for clients and for myself as buyer and seller. When I started selling property 27 years ago, they were very popular. When financing became so easy they almost went away. As lending requirements have become more restrictive, REC's are back and more popular than ever!
Obviously, it is important to deal with an agent like you has lots of experience in these. Do you have a property to tell us about that the owner will finance?
Yes, I do! I have homes available with owner financing starting at $150,000 up to $1,250,000 in many locations in the Greater Albuquerque Area!
No comments:
Post a Comment