Land Contract or Installment Sale

Types Of Seller Financing

There are several types  of creative financing techniques that are covered in this Section. They are,

• "Subject To",
• "Seller Held Mortgages",
• "Agreement  For Deeds",
• "Lease  Options", and
• "Straight Options" 

Some seller financing  techniques give you as the buyer more control over the property than others.

• Logically, the techniques that give you more control  require the seller to be more motivated or flexible.
• Therefore, you  must understand how each technique gives you more control and to what level the  seller must flex.  

Why Sellers Will Give Seller  Financing?

There are many reasons  why a seller would consider doing some form of seller financing.

• However, the  main deciding factor is that the seller wants debt relief.
• For some reason,  the seller finds him or herself owning a house that they no longer feel they  can make the payments on.
• The prospect of someone  taking over the property and relieving them of the monthly payments can be  appealing.  

Some of the reasons why a  seller would consider a form of seller financing include

• a job transfer  (especially people in the military), or
• they could have  lost their job all together.
• The owner could  also be facing foreclosure or
• be getting a  divorce.
• In fact, the  list of reasons and circumstances is practically endless as to why the seller  can no longer afford the house.  

Your objective is to give the seller of that house a solution and that is they will no longer have to worry about the monthly payments or maintaining the house.

Giving The Seller Debt Relief

Your job is to give the  seller the debt relief they need. Therefore,  your objective is to take over the monthly payment in some way or another.

• This may be by  making the seller a lease payment under a Lease Option agreement or
• the seller may  be so motivated that they deed you the house and let you begin making the  payments to bank on their loan.  

It is possible to pay the  seller more than what is owed monthly on their mortgage payment but realize, if the seller is looking to make a profit,  they most likely are not motivated enough.

• Debt relief should be more important to the seller than getting the best deal they can on their house. What it will ultimately come down to though is whether or not the deal works for you as the buyer.