Financial Facts: Sellers take note |

Financial Facts: Sellers take note

As a mortgage broker I work with buyers and owners routinely, but today I want to talk to sellers. In today’s real estate market values are down and buyers are few. So to sell your property you have to price it right and in some cases you might want to offer an incentive that others are not offering.

How about offering to make the buyers payments for up to half a year? Sound illegal? Sound ridiculous? Its’ not. Well it just might be the incentive that gets your home sold and both you and the buyers get a great deal.

There are mortgage investors who have a program where you as the seller can make the first six months of the buyers payments for them. Now I am not talking about you sending the mortgage investor a check every month for six months. I am talking about a program where the first six months of Principal and Interest is figured in the final closing document that both the buyer and seller sign.

As an example we need to look at seller Fred and Ethyl Smertz. They have a home that is on the market for $400,000. The home is in great shape, needs a little updating, but all the basics are there. They have had a few potential buyers but in today’s economy all potential buyers would be tapped out for cash after they make the down payment and closing costs. The Smertz’s have decided to offer the home for sale and offer to make the buyers first six months of payments. This should make their home a lot more attractive to some buyers.

And now along comes Ms. Brooke Trout. Ms. Trout is looking to buy a larger home and turn her current home into a rental unit. She has determined that she has enough of a down payment to make a twenty-percent down payment and some cash left over to update the decor. But that amount of cash would empty her bank account and that makes her very nervous.

So in the price negotiations between the seller and the buyer the seller says that they will put in the purchase price six months of payments. Ms. Trout jumps at that opportunity and the deal is signed by both parties.

The mortgage broker now gets involved and the details on the rate and term of the mortgage are determined and the six months of Principal and Interest are determined. At the closing the seller places that amount of cash with the mortgage investor and Ms. Trout only has to pay insurance and taxes for the next six months.

So a win-win situation has occurred. The seller sells and the buyer buys. So there are mortgage programs available that assist both the seller and the buyer.

Bob Kieber can be reached at (970) 262-1199 or at rkieber@com He is a local mortgage lender and principal of Resort Lending.

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