How To Sell A House By Owner Financing In NJ – The Step-By-Step Guide ( Or is it called seller financing :-)

The economy has changed dramatically in the last 6 to 12 months and many homeowners are discovering that there are new ways to sell their home that weren’t available before. Actually, some of these “new” methods are just the re-birth of methods used in the past. Just not in the recent unprecedented sellers market of the Covid era. You no longer have to sell through an agent that’s the most obvious new method. But also what’s making a come back is that you can accept seller financing. If you’re wondering how to sell a house by owner financing in NJ , keep reading this blog post and we’ll walk you step-by-step through the process…

Step 1. Determine whether you own the house outright or still have a mortgage

In some states, if you have a mortgage you may not be able to offer owner financing (but you can in other states). So the first step is to determine whether you have a mortgage or not. But there are other restrictions on owner financing that are a bit more complicated.

Step 2. Talk to a real estate attorney for help in crafting an agreement

With seller financing, you are essentially acting like the bank. The buyer will pay you a down payment and then pay you regular monthly payments until the house is paid off, and then it becomes their house. Very much like a traditional mortgage. And you may be able to set the terms. So make sure you talk to a real estate attorney to ensure that you are protected and obeying all federal, local, and state laws while also protecting yourself! (If you need the name of a good real estate attorney, get in touch with us and we can make an introduction.)

Step 3. Market your house online and offline

Once your paperwork is in place, you are ready to advertise that you have a house for sale. Be sure to let people know that you offer seller financing. There is no limit to how much marketing you should do – the more you can do, the better. And there are a large pool of buyers that are looking for seller financed homes. Why? Because for myriad reasons, they don’t qualify for a traditional bank loan. Maybe they’re self employed and they don’t have the proper records. Or maybe they had some financial hardship, like a divorce, many years ago, but they have a large sum of cash for a big down payment.

Step 4. Work with potential buyers

As your marketing captures the attention of potential buyers, work with them to show them through your house. When someone makes an offer on your house, negotiate the price and terms with them and find the middle ground that will ensure a win/win situation. We like to use the analogy of a teeter-totter. You can’t sit on both sides. And to make the teeter-totter balanced, the two players need to find that middle ground. When you do find that middle ground, sign the papers and finalize the agreement. It’s also important to have the paperwork ready beforehand. Don’t follow the potential buyers around the house with the paperwork. But have it at the ready in case they make you an offer that you want to accept. That’s why you need to meet with a good real estate attorney before entertaining buyers. It’s essential to have all those i’s dotted and t’s crossed.

Step 5. Collect the down payment and set a closing date.

Once you agree on a price and have signed the papers, collect the down payment, but you can’t just hand over the keys. It’s important to know a title company as well. Because they will be able to hold the down payment in escrow. This will make the buyer feel more at ease. In most situations, you will continue to own the house and collect payments until the house is paid off, then ownership transfers to the buyer.

If you’re wondering how to sell a house with owner financing in NJ , we can help. We might be able to offer you some advice or even work out an owner financing arrangement where we buy your house from you. Talk to our team at 609-531-4990 or by clicking here to fill out the form.

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