Owner Financing. Get Ready, Here it Comes

With the turbulence of the national economy and the sinking lending industry, home buyers and agents need to prepare themselves for what’s to come. To be brutally honest, I was playing with GI Joes and toy cars when we last encountered this type of stagflation. I’m always talking to my clients as if I was a working professional in the late 70’s and early 80’s. The truth is that my boss/mentor has filled my head with an incredible amount of knowledge regarding this troubled economic era. This being his 35th year in the real estate business, he’s seen and lived through a lot. Needless to say, when he talks, I listen.

My comment to the consumers would be to “get it why the gettin’ is good”. The incomparable amount of money that the government has dumped into the market combined with low interest rates and good prices makes this the best time to purchase. You want to know what’s going to happen to all of you that are sitting on your couch in your leased home waiting for the prices and interest rates to drop even further? Well, I will tell you. You better have a fat bank account, stellar credit, and a pile of assets if you plan on financing anything in the upcoming market. It’s my opinion that in the immediate future, we are heading into a time with low prices and low rates with a lack of qualification by most buyers. The banks are getting increasingly stringent with their guidelines. Believe me, I see it on every financed deal that I work now. This time will then be followed up by increasing interest rates. What happens then? The working class people can’t afford to buy a home. For someone that has no flexibility in their monthly payments, a 2 to 3 percent increase in their rate will knock them out of buying anything at all.

What’s the solution? Owner financing to the rescue. I know that all of you sellers have probably moved on to another site while all of you buyers are finding something to take notes on. Well, it’s true. Providing the fact that the seller is willing to finance, this can be a valuable tool to buy real estate in a market with increased financing problems. I just got through with an owner financing deal that closed yesterday. Let’s just say that it wasn’t the most fun that I’ve had recently but it worked out. If you have any questions about owner financing or would like to hear about some of the potential pit falls as a buyer or seller, contact me at beas24@charter.net

Until next time………….