The Colorado Springs real estate market may not look bad compared to many harder-hit locations in nation, but if you find yourself waiting a lot longer to find a buyer for your home, then it may be time to offer owner financing assistance.  Owner financing can be offered to a potential buyer and help you move your property much faster in a sluggish market.  It sounds pretty simple, but in reality it requires a thorough understanding of the risks.

Before you can put the offer on the table for owner financing assistance, it is important to protect yourself both legally and financially.  This starts by doing a thorough review of the buyer’s personal background, including their financial assets and employment records, references, credit scores, and other relevant information.  There is no reason why you shouldn’t perform as rigorous a review of the potential buyer’s qualifications as any other financial institution would. 

Secondly, when offering owner financing assistance, the purchase contract must be very carefully prepared, including the details of the owner-financing loan.  Be sure to include a “deed-in-lieu-of-foreclosure” clause in the contract, as well as the amount, interest rate and specific terms of the loan.  This way, if the new owner were to default on his or her loan, you would be able to take the property back from the buyer.  An agreement should also state that the sale is “contingent upon the approval of the buyer’s financial information”.   

As tempting as it may be, do not enter into a situation where the buyer avoids a down payment.  By investing a lump sum amount in the property, the buyer is more likely to feel ‘invested” in the property and this lessens the risk of default. 

Also, remember you can ask for professional help in executing the contract and closing the sale.  You may require the assistance of a title company and a loan servicing company, as well as a real estate attorney to help you with the closing paperwork and financial aspects of the sale. 

A Colorado Springs realtor may be your best source of advice and support when you offer owner financing assistance.  Contact the professional realtors at Action Team Realty for more information.