HOW TO SELL YOUR "FOR SALE BY OWNER" HOME

Flexible Funding Services is a Texas based company that specializes in helping homeowners sell their house through non-traditional means.  We are not a home buyer or realtor.  Instead we can offer you a unique way to sell your house.  This process, called a simultaneous close, has been proven thousands of times nationwide by us and other companies and is by no means new.

You most likely decided to sell your house as "For Sale By Owner" (FSBO), hoping that you would find a home buyer who qualifies for a traditional bank loan or can pay all cash.  Additionally, you hoped to find this home buyer on your own, without the aid of an expensive realtor.  Perhaps you have found that it is not as easy to sell your house as a FSBO, as you originally thought.   This is where Flexible Funding Services can help you.

One of the most significant problems selling your home as a FSBO is the length of time it can take to find the right buyer.  Your ideal situation would be in finding a home buyer who pays your full asking price and pays cash.  Perhaps an equally ideal situation would be to find a home buyer who qualifies for a traditional bank loan and also pays your full asking price.  Of course you would want to find these people on your own, in order to avoid an expensive realtor.  The question is how long are you willing to wait for the ideal home buyer.  Most likely your FSBO is not receiving the same advertising exposure as a similar home that is listed with a realtor.  Because of this your house may not sell very fast.  When the ideal person, who can pay cash or qualify for a loan, decides to buy a house, they usually call a realtor.  Ideal home buyers typically call a realtor to make their house hunting process fast and easy.  They are not concerned with the realtor's commission.  It is not their expense.  Once a home buyer starts the house hunting process with the realtor, the realtor will of course stay away from your house because he will not receive a commission. 

The question is, who buys the FSBO house.  The answer is usually; people who have been turned down by the banks and have no other place to go.  Most people in this situation will ask you if you will owner finance them.  Most home sellers say no to this question because they need money now and can't wait 30 years to collect.  This is where Flexible Funding Services can help you.

Flexible Funding Services can help you arrange what is called a "simultaneous closing."  This means that there will be two closings that occur back to back, in order for you to sell your house.  The first closing is between you and the home buyer whereby he signs an owner-financed mortgage(s)  payable to you.  The second closing occurs just minutes after the first.  At this second closing you sell this mortgage to Flexible Funding Services, and walk away with the CASH you are wanting.

For the purposes of this letter we will assume that a home buyer cannot get a loan.  We will look at this home buyer as a candidate for a simultaneous closing.  The underwriting requirements for simultaneous closings are more liberal than for a traditional loan.  We will be glad to explain the deeper aspects of the underwriting details, however, in an effort to keep this letter simple we will only touch on a few of the basics.  The home buyer might have bad credit, weak credit, an unverifiable down payment, no down payment, a weak job history, unverifiable income, or a dozen other problems that could prohibit him from getting a loan.  With a simultaneous closing, all of these problems can be dealt with.  Thus, the simultaneous closing will open your home to more buyers than you ever dreamed of.

If this interests you so far, please read the following questions/answers will inform you of the process in greater detail.

What is a simultaneous closing?

It is a process by which someone selling their property can carry the note or take back the note on the property and sell the note at the same time they close on the sale of the property.  Thus they sell the property and the note virtually at the same time.

Why use a simultaneous closing?

If you ask someone when they are trying to sell their property if they would consider using owner financing to help sell the property they would give you two reasons why they would not want to do owner financing.  The first reason is that they do not want to be a bank and collect payments.  The second objection to using owner financing is that they need more than just the down payment.  Using a simultaneous closing would eliminate both of these objections. 

How it works example

To structure the deal three key elements of information need to be known.  How much the seller needs to walk with from the deal?  Second the fair market value of the property. And third a good description of the property. A seller is trying to sell their property for $100,000 but cannot sell it for some reason.  The fair market value of the property is $115,000 using a simultaneous closing the deal would be structured as follows: 

Sale Price                 $115,000

Down Pmt                  $11,500

1^st Mortgage             $103,500

30 year term, 9%, monthly pmt $832.78, 7 yr. balloon = $96,918.39

 
The funding source offers $93,000 for the note.  We can get the broker a fee and also give the seller exactly what they said they needed out of the deal. 

Funding source offer     $93,000 

Down Payment           +$11,500

Total                          $104,500

                                    -$4,500 (Consultant Fee)   

Total                          $100,000 (What the seller needed)

Funding source offer      $93,000

Consultant fee               - $4,500

Net for the note             $88,500

Seller will get two checks:

Check #1                  $11,500 

Check #2                  $88,500

Total                       $100,000                                                                                                    

The actual purchase of the note would occur two or three days after the sale of the property.  In those two to three days the funding source is verifying all of the specifics of the closing and sale of the property.   Once the closing has been verified the funding source will either wire the money to the seller or send them a check for the note.  The simultaneous closing process can work with either a residential or commercial property.

Advantages

A realtor loses several sales a year because the buyer can not qualify.  Using owner financing the qualifying parameters are more flexible than conventional financing.  Someone could qualify to buy the property that might not qualify using conventional financing resulting in a sale for the realtor.  It will be easier for someone to sell their property because the qualifying criteria are easier for the buyer to qualify.

The closing costs using owner financing will be considerably less than using conventional financing.  The only true costs are a credit check, appraisal and title work.  There will be some other minor costs such as documentary stamps.  On a percentage basis the closing cost is considerably less.  There are never any points charged whether it is a residential or commercial property.

Legalities

As a Certified Cash Flow Consultant we cannot talk to both the seller and the buyer to structure a simultaneous close unless you have a realtor and or a mortgage lender license.  We can however talk to either the seller or the buyer and show them how a simultaneous closing would work.  The end result will be the same: an easier way for the seller to sell their property and an easier way for a buyer to get into a property.

Though a simultaneous closing is a not a simple process it is also not a difficult one.  A simultaneous closing is a methodical process that we are very familiar with. 

If this simultaneous closing process interests you please consider calling us and asking us to explain in greater detail, any of the following questions or other questions you might have:

1. Why do I have to take back a second mortgage? 

Answer:  LTV (Loan-To-Value Ratio) limitations, since down payments are usually under 10%, underwriting requirements, and it keeps the discount smaller to the home seller.

2. How long does it take to close once a home buyer is found? 

Answer:  Typically 3-5 weeks.

3. What paperwork is involved in selling the mortgage? 

Answer:  A few document in the beginning, and of course the closing documents.

4. Am I responsible if the payer defaults on the first mortgage? 

Answer:  Absolutely not.

5. Will a full, inside and out appraisal be needed on the house? 

Answer:  Yes.

                    For FREE, No Obligation Consultation

                  Contact us by phone at 817.946.4192 or,