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Sell-real-estate-fast-with-a--seller-second-
By Paul-Jerome
The real estate market has been showing signs of slowing and more and more properties are advertised for sale; however, one real estate transaction type is gaining in popularity and that is the "seller second". In such a scenario, the seller holds a second mortgage allowing the buyer to purchase the home with little or no-money-down. The down payment or a portion thereof is effectively financed with the "seller second".
Since the first mortgage balance will be less than 100% of the sale's price, there is a lower inherent risk to the first mortgage lender who in turn is willing to approve a buyer who would otherwise not qualify for a no-money-down first mortgage. This dramatically increases the pool of potential buyers and that leads to a quick sale in today's market.
Typical minimum credit score requirements for a no-money-down loan are 580 or above; but, with the assistance of a 5% (5% of the sale's price) "seller held second", a buyer can purchase a home with a 550 credit score. With a 20% seller held second, a buyer with a 500 credit score can buy a home no-money-down. With a 35% seller held second, there are no credit score requirements for the buyer.
After closing, the buyer will have two monthly mortgage payments, one payment to the first mortgage holder and a second payment to the seller. The second mortgage is typically structured as a thirty-year amortization with a five-year balloon. At the end of the first year, the buyer can refinance the first and second mortgage into one new first mortgage and at that
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time the seller will recoup the balance of the "seller second". In the meantime the seller will receive interest only payments from the buyer. A year ago, it was a seller's market. Properties were selling as soon as the real estate 'for sale' sign was planted in the yard. At that time, it was not uncommon to hear of bidding wars in the driveway and the subject property would end up selling for more than the asking price. Now we are in a different market. We have entered a buyer's market. Properties remain listed for sale for periods of time that exceed a sellers comfort level. Driving down a typical street in Any Town, USA, one might see numerous 'for sale' signs and even signs reading the likes of "price reduced". Reducing the price of a house does not significantly increase the pool of buyers that potentially qualify for financing for that property and therefore, demand remains unchanged as the result of a price reduction. The solution can be found through offering a "seller second". A "seller second" effectively increases the number of buyers that qualify for financing and subsequently increases the demand. FICO statistics seem to indicate there are approximately 25% of the scorable population in this country that have a credit score between 500 and 649. Offering a "seller second" to buyers in this range can turn them into qualified borrowers and happy homeowners. To offer a "seller held second", a seller will need to have sufficient equity in the property. Also, sellers need to understand that there is a risk of default by the potential buyer. ------------------------ Paul Jerome is a mortgage expert and contributor to Seller Helps Buyer, LLC. Seller Helps Buyer provides a format for sellers to showcase properties 'for sale' that are accompanied by a 'seller held second mortgage'. SellerHelpsBuyer.com Article Source: http://activeauthors.com Paul Jerome is a mortgage expert and contributor to Seller Helps Buyer LLC. Seller Helps Buyer provides a format for sellers to showcase properties 'for sale' that are accompanied by a 'seller held second mortgage'.SellerHelpsBuyer.com
Here are some more estate planning articles...
Creating Estate Tax Savings For Your Child Using A Roth IRA
By Richard A. Chapo
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Is Short Sale The New Buzz Word?
By *** B Ziegler ***
The term “Short Sale” is used as a teaser by real estate professionals (unethical in my opinion) to suggest that a discounted deal is at hand, and that you can score “a good deal” with a distressed Read more...
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Take the Team Approach to Estate Planning
By Courtesy of ARA Content
(ARA) - When it comes to planning a party, most people are sticklers for details. They make sure they have enough food, the right music and the perfect theme; yet when it comes to estate planning, Read more...
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Real Estate Properties Selling Like Hot Cakes? Florida Real Estate Auction, Method Of Sale
By David Yuri
Auction USA is capturing a large shar of the Florida Real Estate Auction market, the marketing approach targets an increased participation of bidders both online thru Ebay and thru attendees present Read more...
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Merrill in for more woe, Goldman analyst says
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More write-downs are on the horizon for New York-based Merrill Lynch & Co. Inc., according to a report from a Goldman Sachs analyst.
William ...Wachovia names Bear vet fixed-income head
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Social Security debit card introduced
The U.S. Treasury has announced that Social Security beneficiaries can now sign up to receive their benefits on a special debit card, rather than by check or direct deposit. While anyone receiving Social Security allocations can sign up for the card, it is being touted as a solution for the unbanked. According to the federal agency, nearly four million Social Security recipients do not have bank accounts, including approximately 600,000 in the Western states, placing them at greater risk of check delivery delays due to poor weather, national or local emergencies, and other check related problems such as lost or stolen checks.
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The process of planning for the orderly administration and disposition of assets after the owner dies.
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