How to Sell a House With Owner Financing:

The Fast Track to Financial Security

Today’s article will show you how to sell a house with owner financing and put you on the fast track to financial security.  Before you finish this article, you’ll have a method to make money in up or down markets, and have what others worry constantly about: cash flow. 

Selling a house with owner financing is not common but it sure is advantageous to your pocket book, and the new buyers are usually grateful and happy.  

First let’s understand that it is perfectly legal for you to sell your own property.  It’s not complicated, and if you do have questions there are real estate agents, realtors and licensed brokers to guide you.

How to Sell a House With Owner Financing:

What is Owner Financing?

Owner financing is when the property’s owner finances the purchase of the house in a private agreement with the buyer. This eliminates a bank’s involvement, although it increases the owner’s risk. Financing the sale means you (the owner) receive installment payments.  The term is up to you: 10 years? 20 years??

how to sell a house with owner financing

Banks prefer to approve 30-year mortgages. Bottom line is the 30-year mortgage is more than likely a 30-page promissory note and IOU filled with legalese on what happens if you don’t pay the bank for the mortgage payments.  I’m sure you know the bank will want to recover their security/collateral which is the property.  The whole process is called foreclosure.  

Foreclosure depending on the state, sometimes requires months. And with attorneys sometimes years especially if it’s a judicial sale with judges and attorney’s arguing.  In some states, Texas for example, the loan document (trust deed) explains in detail that the homeowner will lose the property in 21 days on the courthouse steps as the consequence of nonpayment.  

How to Sell a House With Owner Financing: Case Study

I have thousands of students and many of them show up from time to time and surprise and delight the audience at my 3-day workshops.  This particular short story refers to Mr. B. who shows up to show off a little bit and explain how easy owner financing really is.  The properties he was purchasing were not country club status. 

The properties are under $100,000 and all slightly used and abused.  No shiny rehab’s like you see on those real estate shows on TV with a pretty woman dressed really nice and lots of contractors smashing down walls breaking up concrete continuous hammering and saw dust flying through the air. No, these are properties that ended up in tax default and the treasurer auctioned them for 10 or 20 cents on the dollar.  

My student Mr. B. has been involved in over 60 purchases and resales in 6 years, using owner financing. Imagine for a moment receiving monthly checks from 60 different properties. 

According to Mr. B, you make your money in real estate when you buy. And if you use owner/seller financing, you’re helping the buyer with an installment sale. No banks no lenders. Keep in mind, he purchased these properties at tax defaulted auctions for 10 cents, 20 cents or 30 cents on the dollar.  Here is his process:

  1. Once he has purchased a property, he put signs up. Ugly signs that clearly point out owner/seller financing is available. 
  2. Next, he contacts a title company to get legal contracts and installment note documents. Yes, you could use an attorney, but the title company is much less expensive. Most attorneys will also have all the documents already created in their computer database.  
  3. Mr. B and other savvy owner sellers use Craig’s list, eBay, Facebook marketplace to sell their property. Basically, every electronic sales media possible.  The ads all contain the words owner/seller installment financing available.  

I’m not an attorney or a broker or a CPA. I’m an investor and an author publisher and I want to encourage you to follow the laws. For example, truth in lending, disclosure laws. These are all at the state and federal level. They are free and you must comply. 

How to Sell a House With Owner Financing: Why it Works

Owner/seller financing works in up markets and down markets because approximately 20% of the market of purchasers is credit-challenged. That means they have poor FICO scores and banks reject these potential buyers.

Many are good credit risks because they have excellent high-paying jobs.  The challenge is they may have had a recent divorce, a history of a bankruptcy, or they have made poor decisions in the past.  

I recommend you use owner/seller financing and a contract not a mortgage to sell homes and earn high interest checks. However, do not transfer the title/deed until the last payment has been completed.  I’m not a financial wizard but owner/seller financing is one of the best ways to add to your profit.  

Now you know how to sell a house with owner financing. If you would like to get started purchasing properties for pennies on the dollar and offering owner/seller financing, then I have a free gift for you: a 1-hour, streaming-video mini course that will teach you the secrets of one of the safest high yielding investments available and how to generate cash flow in real estate.

If you’ve decided it’s time to take charge of your financial future, then this Free Course is the best way to get yourself started on the road to success!


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