Why You Should Consider Owner Financing When Selling a House in Atlanta

Why you should consider owner financing when selling your home in Atlanta

Do you want to sell your house in Atlanta? Using an owner financing agreement can help you find buyers faster and ensure you are getting a great price for your home. Learn more about some of the perks of using selling using this method in our latest post! 

Providing owner financing to potential buyers is a great way to not only sell your house but to generate cash flow as well. You can think of it like this: instead of working with a bank, you become the bank for your buyers. The buyer gives you a down payment, and then sends you monthly payments until the loan is paid in full.

One of the major advantages of selling this way is that you can usually get your asking price – or sometimes more. Sale price doesn’t matter as much as the monthly payments when you provide seller financing.

Sell Faster

When you use an owner financing agreement to sell your house in Atlanta, you will typically be able to find buyers much faster than if you put your house on the MLS. Houses can sit on the MLS for months at a time, sometimes without any interest or offers. The listing can expire, forcing you to start over or reduce your asking price… two things nobody wants to do.

Owner financing can attract more people and get your house in front of the right buyers. You will likely be able to generate interest much more quickly than a typical listing. As long as you do not need the entire sale price for the house upfront, selling your house with owner financing makes sense for a lot of people.

If you want to sell your house fast in Atlanta, don’t be afraid to consider a seller financing offer. Here at Homeowner Help Today, this is one type of offer we recommend you consider when a cash offer seems too low.

Appeal To More Buyers

Owner financing provides more people the opportunity to buy your home – not just traditional buyers.

For instance:

  • People who are ready to buy a house in Atlanta but are working to save up that 20% for a down payment
  • People who imagined they’d rent for the time being, but saw your house and simply fell in love
  • People that don’t qualify for traditional financing. We’ll dive into this one more below. This doesn’t have to be as scary as it sounds!

Opening your house to this new market of people will increase your chances of selling faster and for the price you want.

Get Your Asking Price

Probably the biggest advantage to owner financing is that you can get your full asking price, or sometimes more if there are several potential buyers. Yes, you may also be able to get your full asking price on the MLS through an agent, but you will have to 1) pay the agent commission, 2) pay for repairs, staging, etc. to get top dollar, and 3) wait for months while the house sells and the new buyer works to secure a traditional loan.

When you use owner financing to sell your house in Atlanta – you essentially become the bank. Your buyer will pay you a down payment upfront and monthly payments throughout the duration of the agreement.

You may not have to make any repairs or really do anything to the home as long as someone is ready to buy it. Closing costs are cheaper because you don’t have to pay the lender’s closing fees.

This is faster and less expensive than selling the traditional way. You can also feel good that you are helping someone own a home that may not be able to secure financing the traditional way, or maybe they just prefer working directly with you, the seller, rather than go through the banks.

Create An Income Stream

Creating a deal with monthly cash flow is one of the major benefits of owner-financing. Also know that if you do need more cash at some point, you can usually sell the owner financing agreement to another investor. Essentially they now become the “bank” to whom the buyer sends a monthly payment, and you cash out.

Buyers are also much more concerned about making their payments because they have more on the line than a renter would. They will be out of a substantial down payment and any previous payments they have made towards their equity at that point.

Tax Advantages

Depending on the sale price of your property, and whether it is a primary residence, you may have to pay capital gains taxes and/or depreciation recapture when you sell. Owner financing can allow you to break these tax hits up over the length of the new loan, instead of having to pay it all in one year.

There are a lot of rules and considerations here, so you definitely want to consult with a good CPA to run through your options. Just know that owner-financing can be a way to soften a potential tax bomb when you sell.

What Are The Risks to Owner-Financing?

There are a few risks to owner-financing a home, so let’s take a look:

  • What if your buyer stops making monthly payments?

If they don’t make the payments, you have a few options. Most of the time you just have to communicate with them and work out a plan. Depending on the structure of the agreement, you can evict or foreclose if you are unable to work something out with your buyer.

While nobody wants this, it is a possibility. Just know that you are protected and you have options if it does happen. You also retain the down payment and any monthly payments that have been paid up to the point of default. As mentioned earlier, this means that your buyer is much more likely to make their payments than a renter.

  • Are buyers riskier because they don’t qualify for traditional financing?

Maybe, or maybe not. Since the real estate market crash in 2008, lenders are much more stringent about who they qualify for a loan. Credit score is obviously very important, but so are things like the amount of debt someone has compared to their income, and how the lender sees job stability.

If you have a potential buyer with a decent credit score, a good job, but a high debt to income ratio – they may not qualify for a bank loan even though their job is secure.

Or maybe the buyer just started a new company. They may have plenty of money and income, but since they do not have a “stable” W2 job, many lenders will not qualify them for a loan.

Also, know you can potentially charge a higher interest rate for protection since what really matters is that the buyer can afford the monthly payments. If you need some help structuring an owner-finance deal, reach out to us for help.

Obviously the key here is picking the right buyer, and you can do this by thoroughly vetting all potential applicants. You can even hire out services who have experience with this to help you make the right decision.

Key Takeaways

Selling your home using owner financing can be very beneficial to all parties involved. You can attract more buyers, get the price that you want, create a monthly income stream, and secure some tax advantages.

We also love owner financing because it’s a great way to help people buy homes who can’t always purchase one through the traditional way. Win-wins are awesome!

Do you want to learn more about how owner financing will work to your advantage when selling your Atlanta? Reach out to us today for answers to all of your selling questions! (404) 500-8094

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