Tips To Offer Seller Financing Safely

In recent times, we have been witness to a number of changes, as far as the real estate sector is concerned. In the last few years, there has been a steep rise in the number of real estate financing by sellers. As a seller, you may like to extend credit to the buyer of your property. There may be several reasons to it, such as higher price, a good return on your money, a faster sale and to sell a property that is otherwise difficult to sell. Most people however, opt for seller financing, in order to avoid the involvement of the third party. The buyer may save a few bucks and the seller is not at a loss.

Now, although, you may be thinking in lines of seller financing, it would be better, to avoid any kind of haste. As it is, you should consider a number of steps, to make sure that, you are not at a loss. The following are some of the factors, which you need to consider, while you opt for seller financing:

1. The first thing, that you must make sure, is to ask for a large down payment. A large down payment would help you, to lower the risk involved with seller financing. As it is, it is one of the most effective ways to avoid risk in seller financing; and not always possible to get.
2. Make sure, that you have ample security or collateral, to fall back upon, in case of any unforeseen circumstances. Most sellers opt for huge security, or collateral, in case the buyer is not in a position, to make a large down payment. Usually, the collateral is in the form of mortgage on the other property of the buyer. Collateral would lower the risk involved in seller financing and you will have a provision for succor, in case, the buyer does not pay up.
3. Another important aspect in case of seller financing is that of credit check. Make sure, that you have satisfied yourself properly in regard to the credit score of the buyer. This is one of the most important things to do, in order to satisfy you about the credibility of the buyer. By way of credit check, you can reduce your chances of losses by a large margin. Also, it needs to be mentioned here that, type of bad credit is also very important.
4. You should also consult an attorney to formulate the clauses of the contract. This would also be a great step. An attorney would help you incorporate clauses in your contract, by which, you would be able to lower your scope for incurring losses.
5. Another important factor is that of instincts. Your instincts can play a very important role in the entire process of seller financing. Make sure that you are selling the property to the right person. Your instincts can be your best friend, in selecting the right buyer.

Seller finance is a very sticky stuff and hence, you must take proper care in selecting the right person for extending seller finance.