If you want to sell or own a home on the market that has not been sold off for quite some time, you can consider financing the sale yourself. Follow these tips to simplify the whole process. Ensure you have a clearly written land agreement that outlines each detail of the process. This is actually your purchase agreement.

Give yourself a title company and ask your title agent to record the land contract with the county. This makes the whole process official. Ensure you receive a good down payment. 5% is ideal, but if the buyer can’t pay this, make sure they pay at least a couple of thousand dollars. As a result, the buyer owns a certain amount of equity and thus can easily go for a normal refinance loan. Make the terms very clear and direct.

As with any other mortgage, this loan has an interest rate, a 30-year duration and balloon payment. This implies the payment is to be made over the duration of 30 years, thus simplifying things for the buyer. However you will get your whole amount within a certain time frame. It makes sense to discuss your credit worthiness with the buyer. You are offering credit, assuming that the buyer will approach the bank for the regular mortgage to pay off your credit. Hence the bank will ensure they deal with a reputable borrower.

Hence it makes sense that you teach your buyer about improving his financial position so that he can get a loan easily. This in turn, will benefit both you and your buyer. Ask him to pay by a check, to let the bank track the payments. Speak about credit cards and other monthly debt and ensure he is aware of making timely payments for each of these loans.

Lastly, inform him that he needs cash reserves equal to a couple of months’ payments as savings to get the loan. Hence he should begin planning in advance and commence savings each month. Other assets like as retirement benefits, stocks, and types of money that can be easily obtained will also do. Ultimately tell the buyer to do everything within his means to take care of the home and take steps to improve it as it will lead to increase in the worth of the home that will be vital in obtaining a refinance for the normal loan.

These are some crucial steps in seller financing.