10 Ways of Using Seller Carry Back For Your Advantage

Seller Carry Back is a new trend for sellers and buyers for them to finance a property in the real estate markets.

Will this be the new trend for extravagant promotion?

10 ways to use seller carry back in buying and selling properties.

 1. Installment Sale Tax Deferral – Under the Installment Sale Method (see IRS Publication 537, Form 6252 and talk to a competent tax professional for further information), the seller can delay some parts of their tax.

 2. More Buyers – When some lenders like banks tighten their approval procedure, the seller carry back allows bigger number of buyers to buy and invest a home.

 3. Secure Asset – The remaining balance of the property is being collateralized. When the buyer stops paying, the seller can take the ownership back.

 4. Interest Income – Seller can have a long-term interest because they are acting as the bank to the buyers. They will pay two to three times the mortgage on a thirty year-term as an interest.

 5. Reduced Restrictions – No more buyers’ down payment, credit history, money owing to other underwriting criteria and income ratios.

 6. Liquid Asset – Sellers means of saying somebody will buy mortgage, note, contract or trust deed in the open market. Most sellers trade their future payments to a note buyer or note investor for cash than overtime payments.

 7. Speedy Closings – With “Seller Carry Back”, real estate transactions may close in as little as 2-3 weeks.

8. Maximize Selling Price – This is also a sales concession in the market. The seller knows the full market value of the property before financing it.

9. Fewer Costs – No more expensive loans. Buyers can put their savings on underwriting fees, mortgage insurance premiums, origination fees, points, and junk fees thru building equity and down payment.

10. Shorter Marketing Times – “Owner will Finance” can have a greater reply rate and can sell at least 20% quicker than conventional financing in real estate property markets.

Seller financing makes a solution to financing real estate however, there are some risks (refer to the Disadvantages to Owner Financing). Try to consult a qualified tax, real estate, and legal professionals for assurance.