Seller Financing
Banks and mortgage lenders provide financing for the majority of Downtown L.A. loft sales, but they are not always the right source of purchase funds. About 20% of Downtown Los Angeles loft sales are paid for in all cash from the buyer. Some are unaware that the seller can sometimes help with financing as well. This is called a Seller Carry because the seller carries all or some of the financing. The seller acts as the lender.
Seller carry backs are most appropriate when the seller does not immediately need all of the cash from the sale, and the seller can let the buyer make use of the funds. The seller might want a quick transaction, and the best prospective buyer cannot use or does not want to use a traditional bank or mortgage lender financing because the buyer does not have a regular job, but has plenty of assets or miscellaneous income. #sellercarry #loft #financing
Owner-provided financing is sometimes advertised in property listings or advertisements as seller financing or owner will carry (OWC). Once very popular around 1980 when interest rates were 20%, seller carry backs are again growing in popularity as getting traditional home loans from banks becomes more challenging due to recent regulation and restrictions. Challenging loft buildings such as SB Grand also represent a good example of where seller financing may save the transaction when loft lenders fail.
When a homeowner wants to sell a home but has trouble getting enough qualified buyers due to tight lending practices, the seller can “carry back” the note on his own home sale. The buyer and the seller sign a promissory note in which the buyer promises to pay a specific amount of money, with a specific interest rate, at a specific time. The seller moves out, the title transfers, and the seller collects monthly payments from the buyer. Escrow can help by generating some of the required paperwork. More seller carry info at MoneyUnder30.com.
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Copyright © This free information provided courtesy L.A. Loft Blog and LAcondoInfo.com with information provided by Corey Chambers, Realty Source Inc, BRE#01889449 We are not associated with the homeowner’s association or developer. For more information, contact (213) 880-9910 or visit LAcondoInfo.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.