Having a hard time selling your home?  Try offering seller financing!  Can be a win-win situation in today's buyer's market.  The article below has been provided as a public service by W. Adam Mandelbaum, Esquire, Attorney-at-Law.  For quality, affordable legal advice, consider speaking with Adam Mandelbaum by calling his Oyster Bay, Nassau County law office at (516) 624-0240 or go to his website at www.justiceneversleeps.net.

"Seller Financing to Speed a Sale"

When considering giving seller financing, let's talk about decreasing risk.  Real estate analysts keep telling us housing activity will keep falling even with the cutbacks in production.  The backload of unsold homes is remaining near record levels.  Plus the reality is rising foreclosures are forcing even more properties onto the already overloaded marketplace.

So maybe you are thinking about taking back a mortgage when you sell your home.  Here's how to increase your chances of financing to win! 

The better the credit rating of the buyers, the more valuable is your note.  The more likely you're get timely paid, and the more you will get if you want to sell your note to a purchaser of seller financing.  (Usually a private entity which will discount your note for cash).  So get a credit report on everyone that's going to be on the deed.  If the FICO is not good, do not provide financing -- period.

No more than 70% loan to value.

You have a better chance of getting paid if a buyer can put down 30%.  You have a better chance of selling the note.  You have a better chance of being properly compensated on a foreclosure sale.

The borrower must occupy.  The owner occupier is more likely to make payments because this is their home.

Get an appraiser, the buyer pays.  If you are playing bank, you want to make sure that you are not overlending, and you want the potential buyer of your note to feel more secure about the loan to value ratios.

Get a personal guarantee from a LLC or a Corporation.  The more possible sources of payment, the more likely you're be paid, the greater chance of selling your note, if you want.

Prior to selling your note, have a least one year track record of being paid on time.  There is no doubt that where the buyers have made payments for a year or more on a note, it is more value than a new one.

The higher the interest rate, the more attractive the note is to a potential buyer.

Make sure the mortgage is properly recorded.   It's your collateral.  Get a lawyer to do this.

Put the proper term on the note.  No less than 3 to 5 years.  No more than 5 to 7 years.  Too short a note, or too long a note, will scare off a buyer.

NOW WHY WOULD ANYONE WITH GOOD CREDIT AND 30% DOWN WANT YOU TO FINANCE THEIR HOME PURCHASE?   They may have problems showing income.  The property may have certain problems that are not important to the buyer, but would kill bank financing  --  could be a variety of reasons.

We are talking a special situation here.  If considering taking back financing, you have to have an attorney help you.