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Creative Solutions to Selling Your Home in a Slow Market

Current economic and real estate market conditions present some real challenges for some home buyers and sellers. Add to this the fact that every buyer, every seller and every lender is unique and you have a fairly complex environment in which to do business.

This all adds up to one thing – if conditions warrant creative deals and you aren’t offering them then you could find yourself at a competitive disadvantage.  Yes, the house may sell, but did you allow yourself to be pressured into lowering the price in order to sell? Did you lose some of your money in the transaction while thanking the Realtor for being aggressive and “getting results”?

It is important to find a Realtor who understands creative financing in order to increase the number of potential buyers for your home and ensure that the deal doesn’t fall through. To create buying incentives  the seller just may want to consider introducing creative financing solutions to the buyer instead of the typical alternative of lowering the price of the house, which many Realtors typically pressure sellers to do in today’s housing market.
Motivated sellers have several cards to play if they truly want to sell their homes in a sluggish market keeping in mind the goal of attracting the right buyer.   Important considerations include establishing exactly who you are marketing to and what are the potential barriers that buyers may need to negotiate. Let’s look at three requirements of purchasing a home:
1. The buyer must have the appropriate income and assets to afford the home
2. The buyer must have good credit
3. The buyer must qualify for a mortgage in an environment of increased lending scrutiny and standards.

Sellers can actually assist in all three areas. In other words sellers have the ability to help buyers who don’t have the income or down payment funds available to qualify for a loan amount,  or who may have less than perfect credit.

Below are three areas of creative financing worth considering for seller, buyers and lenders:

Creative things Sellers Can Do to Sell Their House

1.Seller Contributions
2.Seller-Funded Permanent Buydown
3.Seller-Funded Temporary Buydown
4.Owner Financing
5.Contract for Deed
6.Seller Second
7.Lease Option and Lease Purchase
8.Wraparound and Assumable Mortgage

In addition to seller concessions listed above, Buyers and Lenders can offer unique solutions as well:

Creative Things Buyers Can Do to Purchase a Home
1. Gift Funding
2. Selling and Refinancing Existing Assets
3. Non-Occupant Co-Borrowers
4. Using 401K
5. Temporary IRA Transfer
6. Pledged Asset Mortgage
7. Equity Transfer and Bridge Loan
8. Employer-Assisted Mortgage

Creative Things Lenders Can do to Finance a Transaction
1. Lender-Funded Buydown
2. Fannie Mae’s “My Community Mortgage”
3. Running Scenarios With Automated Underwrtiting Systems
4. Adjusting Amortization Period to Lower Payment
5. Adjusting Interest Rates to Cover Closing Costs
6. State, Province, and Local Grant or Bond Programs
7. Mortgage Credit Certificate
8. Private Lending

As you can see, the buyer, seller and lender can all bring creative solutions to the table to get a house sold. Make sure your Realtor is well versed on creative solutions that help get your house sold in today’s market so that you aren’t faced with having to lower the price and leaving money on the table.