Seller Financing: The Best Loan
In non-Seller Financing real estate transactions, unless the transaction is for cash, the buyer would have to seek a loan from a 3rd party – such as a bank – to finance the purchase. The 3rd party lender would charge interest on the amount borrowed. In the case of land, it is very difficult to find 3rd party lenders who will loan money with land as the collateral. Even if you were lucky to find such a one, the interest rate would be astronomical and the required down payment would be significant – at least 40%-50%. As a result, land transactions are almost 100% cash transactions. [Note: frontierlandeals down payments are as low as $390] Seller Financing, also known as Owner Financing, is a real estate transaction where the seller is also the lender. The seller sells the property and also finances the purchase for the buyer. Typically, the terms of the sale are very negotiable and the seller will most likely work with the buyer to facilitate a loan that is workable for the buyer. Typically, seller charge premium interest rate on seller financing note since the buyer is unable to find a loan through traditional source. [Note: frontierlanddeals.com charges 0% interest rate!] The buyer pays the seller a down payment at closing and then make agreed upon monthly payments to the seller until the note is paid off. In some cases, the seller may use an escrow collection company to collect the monthly payments on his/her behalf. The escrow collection company will handle the interest calculations and related tax documents. They usually charge a setup and monthly fees for this service. Transaction costs are much less on Seller Financing transactions than traditional bank financing [Note: frontierlanddeals.com charges a single Document Preparation fee of $59]. These fees are completely negotiable between the buyer and seller.
Advantages to the Buyer
There are many advantages for the buyer when buying with seller financing. They vary depending on what the seller is willing to negotiate. Buying land from frontierlanddeals.com, the advantages to the buyer are numerous:
- Control of the property with a low down payment
- Easy affordable low monthly payments
- Wholesale prices
- Fully amortized loan
- No balloon payments
- No pre-payment penalties
- No credit checks
- No qualifying
- No loan fees or points
- No debt ratio requirements
- Quick closing
- Money back guarantee
Advantages to the Seller
By offering financing, the seller broadens the market of potential buyers. Now more buyers can afford to purchase the property. There may be some tax advantages to the seller by spreading the payments over time. Sellers have the ability to earn interest on the loan. [Note: frontierlanddeals.com charges 0% interest rate!]
Conclusion
Seller financing can be an excellent option for both buyer and seller. It offers the buyer an opportunity to buy land they otherwise could not afford, and allows sellers to sell land in a market where cash sales might be difficult. Frontierlandeals low down payment, low monthly payment, 0% interest rate loans are ideal for a buyer who wants an affordable way to own a piece of the American Dream. Check out our current listings and purchase your parcel today.