Seller financing has positive and negative aspects that buyers should pay attention to. These pros and cons will appeal to different buyer’s needs, so it is helpful to better understand these aspects. By reading the following article, you will gain more information on the advantages and disadvantages of seller financing.
As a buyer, seller financing offers many advantages. “If you don’t qualify for a traditional mortgage, you may still be able to obtain seller financing,” according to Lawyers.com. In addition, seller financing typically has lower closing costs due to the elimination of bank “junk fees.” But that’s not all, sales can even close quicker with seller financing than with bank involvement. If you’re in a hurry, seller financing may be perfect for you. Seller financing also offers more flexibility when it comes to negotiating and refinancing in many cases.
With all of these pros, you may be wondering what the cons of seller financing are. There are some disadvantages for the buyer you will want to look out for. One of these disadvantages is higher interest rates. “If you’re unable to qualify for a traditional mortgage, the seller may be able to get more money from you or charge a higher interest rate,” Lawyers.com explains. Plus, the efficiency and organization of the seller may affect the financing process. Some sellers could be sloppy and unorganized, causing you to have trouble getting receipts, statements or tax documents. Some sellers may even set shorter terms for loans or require balloon payments, forcing buyers to find large quantities of money or refinancing options.
Now that you know the advantages and disadvantages of seller financing, you’re better prepared for your buying experience. For more assistance in the buying or selling process, consider working with us at Hallmark Business Brokers. Our top priority is assisting customers with their buying or selling, so reach out to us today! You can call us at 941-375-8240 or visit us at 230 S. Tamiami Trail Suite 2 in Venice, Florida.