Nationwide, owner financing is fast becoming a viable alternative over conventional lender financing for both sellers and buyers of real estate.

Here's Why: While interest rates are at historic record lows, market prices are at an all time high. In some areas of the country, especially metropolitan and resort areas statistics are revealing jumps of 10, 20, even 50 percent in just a few short months. Economic indicators and experts predict no sign of change in the near future.

As such, the impact on sellers can be a double edge sword. On the one side, sellers are receiving enormous returns on their investments when they sell. Great! One the other side, the potential pool of qualified buyers through conventional financing is rapidly decreasing. As prices rise, purchasing power of those qualified to make monthly mortgage payments decreases. Lender guidelines are extremely strict, limiting the number of people able to qualify for a loan. Not So Great!

If you are a potential seller or a potential buyer this most certainly could have a direct impact on you. Owner financing could very well be for you.

Here's how it works:

In seller or owner financing the seller holds the mortgage contract or "note" and effectually becomes "the bank". Buyers need only meet seller guidelines. Seller and buyer negotiate terms and conditions, mutually agree to those terms in writing, a title/escrow agent or attorney prepares and completes paperwork necessary to close the deal, seller holds the "note" and deed/title until the loan is paid in full and the buyer makes regular monthly principal and interest payments to seller.

Simple!

Advantages to Seller:

Doubling or tripling the potential buyer pool
Lump sum cash down payment
Regular monthly principle and interest payments
Interest payments that far exceed conventional bank issued savings plans or certificates of deposit
Far less risk involved than investments in the stock market
Balloon payment made at the end of loan period (Typically 15 years or less)

Advantages to Buyer:
The ability to qualify after being turned down or limited by conventional lending institutions
Increase in purchasing power (larger or more expensive property)
The ability to negotiate terms, conditions and or interest rate with seller
Saves thousands of dollars in lender fees and or "points"
The satisfaction and increased financial security & leverage that comes with owning real estate