Here are three options you need to know about in our shifting market.
In our shifting housing market, buyers and sellers have new options that haven’t been available for years. Today I’ll discuss three of these options and how they might help you secure a fantastic deal:
1. Seller carries. This is when a seller provides some amount of financing for their buyer. They might do this to help the buyer reach a certain dollar amount or achieve a better interest rate. If a seller is adamant about their price but willing to negotiate on terms, a seller carry might make sense. If a seller needs to sell to put their equity towards a new home, this option probably won’t work, but in other cases, this could help you salvage a struggling deal.
2. Lease options. This is made up of three pieces of paper: a lease, an option, and a purchase contract. The buyer will provide a lease at a higher rate than usual. For example, if the rate would normally be $2,000 per month, they might bump it up to $2,500 per month. They’ll take the extra money and put it into an account for their down payment. The option will allow the buyer to purchase the home for a set purchase price at a later date. However, the purchase contract allows them to live in the property like they own it until they have the funds ready to purchase it.
3. Subject to. Essentially, this allows buyers to take on the terms of the seller’s current mortgage as their own. Current interest rates are around 6%. If your seller’s mortgage has rates of 2.8%, and they don’t immediately need the equity from their home, this is a fantastic option.
If you have questions about any of these options, don’t hesitate to reach out by phone or email. I’d love to have a strategy session with you.