You’ve heard that this is a Buyer’s Market? Well here’s the thing: Every market presents a great opportunity for someone, and if you are a seller in Dayton Ohio, there could be a chance for you to make money, even in this market.
Consider: Everybody needs a place to live, and Daytonians are no different. So while you may have heard about changes in lending practices and how this will make it more difficult for buyers to obtain a loan through a lender, what this really means is that other options have now opened up for both buyers and sellers, but particularly for sellers.
Once upon a time (way, way back in the 80’s) a typical home loan came with a double digit interest rate of 12-18%. Shocking and unheard of today, but it was the norm 30 years ago. Buying a house was difficult and there was a real barrier to home ownership, but this meant a few things happened: One is that you really had to work at purchasing a home. You had to want it, value it, understand the implications of a loan and how it would impact your life. That’s not a bad thing, is it? The other thing that happened is that home sellers could actually compete against banks by financing the loan themselves. Seller financing, lease to own, lease to purchase, and land contracts, these were common alternatives to a conventional loan.
Once interest rates dropped and loans became easier to obtain, owner financing become less attractive to buyers and almost impossible to compete against for sellers, but that niche market has come back as an attractive alternative for sellers looking for options in this market.
Seller or owner financing can provide value to those sellers who might be looking for a way to aggressively compete in a strong buyer’s market because your buyer pool is going to increase significantly. It’s one of the most frequent requests I receive from home buyers. Or, maybe as a seller you are looking for a different way put your investment money to work? Well-planned seller financing could produce a higher return than a traditional rental or other investment. And you might consider seller financing if you simply want another stream of income, but are looking for an occupant who is a little more serious about the property than a renter.
But seller financing can benefit buyers in a few ways as well. Buyers who might have a poor credit score now and therefor can’t get a traditional loan, but are well on the road to recovery, can still buy a home and enjoy the benefits of home ownership. And the purchase process itself is much quicker, and possibly less expensive, without the added participation of a lender and all the added fees. One thing for a buyer to be aware of- there is a huge demand for seller financing right now. That particular niche is a strong seller’s market, which means you could be paying a premium for the property. In all things financial- caveat emptor.
Owner financing isn’t an option every situation, but if you are buying or selling a home in Dayton, you might want to educate yourself to all the possibilities- which is beyond the scope of this one article. Take your time and talk to experienced professionals. Lawyers, real estate agents, tax accountants, can all provide you with information, and often guide you through the process to help you make solid decisions about any real estate transaction.
The real estate market continues to change, in fact it will always be changing, but as I’ve said before, the key to making the most out any real estate market is by keeping your eyes open for whatever new opportunities the most current market presents.