There are certainly many different ways that you can make your house more appealing to a potential buyer but did you know there are also multiple ways you can sell your home? No, this is not some trick, joke, or scam. Believe it or not, there are at least 7 creative ways to sell your house, without having to endure expensive renovations, the hassle of listings/showings, paying high realtor commissions, title fees, or waiting months on end to find the right buyer.
If you want to sell your home quickly, but traditional routes are not working for you, the following options just might be a good fit.
In this article we will discuss 7 creative ways that you can sell your home, often faster and sometimes for an even higher price than a traditional sale.
1. Cash Offer
A cash offer is a quick way to sell your house. With this option, buyers or investors will your house as-is (no renovations needed), can close faster than a normal sale (with less contingencies), and do not require bank financing. Cash buyers usually pay all closing costs and fees as well. Since there is usually a quicker selling time with this route (and you get to pick your closing date in most of these transactions) there is also a lot less paperwork involved, making it an easier process. However, if you don’t have enough amount of equity in your home (typically 25% or more) another solution might fit you better.This option is great if your house needs a substantial amount of work, if you are in a hurry to get out of the property, or if you don’t want to wait for buyers who are shopping around for other options.
Professional home buyers such as Door&Key Homebuyers, can help you explore this option. You will normally trade some equity for speed and convenience but then again you will also save on the cost of realtor commissions, inspection fees, title fees, repairs, red tape, and the amount of time it will take to sell your house. A cash offer closing can range from 3 to 30 days.
2. Seller Finance / Seller Carry
If you are fortunate enough to own your own home outright, then you have the option to “become the bank” and take payments from an end buyer (for a previously agreed upon period of time). With this option, a note would be created (instead of with a traditional bank or mortgage lender) and you would collect payments each month from the buyer. In many seller finance transactions a balloon payment will be set where you are paid the remaining balance on the note at the appointed term (usually around 5-10 years out).
This is a good idea if you are looking to reduce your tax liability on the sale of the property while receiving monthly passive income. Upon closing, the buyer does not have to give the entire balance to you in full, in the way that they would with a traditional mortgage loan. This means they can often pay more for the property. In addition, the buyer agrees upon terms and conditions of the sale, a promissory note is created, and consequences are established if payments are not met.
You can also avoid making certain improvements to the home under this arrangement, whereas many traditional lenders will require certain upgrades to be done first in order to move the sale forward and fund the transaction.
3. Subject To
Subject-To is a form of creative financing where a buyer or investor agrees to take over your current mortgage payments while keeping the existing loan in your name. At closing, the deed would be transferred to the buyer. With this option, the buyer commits to making all monthly mortgage payments on time. This is typically done through a servicing company, so that all payments can be tracked. In a typical Subject-to transaction, the buyer also understands that if just one payment is missed, the seller (i.e. – you) can take back the property without going through the standard foreclosure process. Instead, the title can be transferred back to your name almost immediately. This process is sometimes called a “performance deed” or “deed in lieu”. This can protect you (the seller) from major headaches. Typically, the buyer also has an incentive to make on time payments, since he/she will normally have a substantial amount of money invested from the beginning (for example – cash to you at closing, closing costs, repairs or renovation costs, marketing costs for getting the property rented out, holding costs during renovations, insurance fees, etc.).
Subject To is a great way to sell your home when you’re looking to change your finances, need to sell quickly but your home has little to no equity, or you’re not sure of the future. Also, if you are having credit issues, need to avoid heavy tax implications, are facing bankruptcy, or are getting ready to be foreclosed on, this may be a suitable option for you.
A hybrid sale is essentially a mix between a Seller Finance sale and a Subject To sale. In basic terms, this is where the buyer takes over your existing mortgage payments, on your existing loan, while also creating a note and making an additional payment to you on your existing equity. Thus, the buyer makes two payments each month, one to you and one to your bank. Sellers who choose this option often do so when they are looking to avoid burdensome taxes or when the property is in need of a lot of repairs or maintenance. This option can also work well for owners who are ready to be finished with being landlords.
5. Novation Agreement
What is a novation agreement?
Short for “renovation agreement”, a Novation Agreement is where a buyer partners with you (the seller) to renovate the property, list it on the open market, and sell it to a third party. Upon sale, you receive your share of the equity (a previously determined amount) and the buyer/investor receives the rest.
In this arrangement, the house is not sold to the investor. Instead, the investor agrees to pay for most or all of the renovation costs in exchange for the profit that would be made after the sale of the property to a third party (the end buyer).
This option can be ideal when the property needs substantial renovations but you are not able to afford them or when there is not enough equity for a cash sale.
6. Lease Option
With a lease option you agree to lease your property to an end buyer, for a certain period of time, while also giving them exclusive rights to buy (i.e. – the option to buy) at the end of the term. During this period, title is not transferred. At the end of the lease term, the buyer then has first right to buy the property at a previously agreed upon price. This is often called “executing the option” and would occur when the buyer is able to obtain financing to pay you out in full or when they are able to pay cash for the property, meeting the terms of the option agreement.
Upon signing a lease option contract, the potential buyer purchases the first right to buy the property using what’s called a “lease option fee”. This fee can be paid with one payment, or spread out in monthly payments. In some Lease Option agreements, the fee is included in the monthly payment. Lease Option fees are nonrefundable.
If a buyer purchases the option, and later decides not to purchase the home, the option then expires and their fee is kept by the owner.
This selling strategy can be helpful if you (the seller) are looking for monthly cashflow, a lower tax burden, or you are not comfortable transferring title right away.
7. Contract for Deed / Land Contract
A Contract for Deed (sometimes called a Land Contract) is similar to Subject-To Creative Financing. However, the main difference is that the property stays in the seller’s name (the title is not transferred) until the buyer pays off the existing mortgage or note.
As the seller, you get to keep the home or property in your name, which can help with tax deductions in the form of depreciation, while obtaining monthly cash flow. In addition, you can often negotiate the down payment, interest rates, and timeframe of repayment when there is no mortgage on the property. This is similar to a seller finance transaction (only, again, the deed does not transfer until the note is paid in full). If the buyer defaults, you still get all of the money put towards the mortgage or note.
This option can also be helpful when your buyer does not have the ability to get a traditional loan (such as when they are self-employed or have imperfect credit). You can also avoid the renovation costs a lender would require during a traditional sale and can usually keep things as is. In this case, the buyer would be purchasing the house as-is.
Contract for Deed transactions can also include balloon payments (typically 5-10 years).
Learn more from Door & Key
With Door & Key you can sell your home quickly and easily without any hassles or headaches. Imagine if one of the best ways to sell your home was also the easiest way. Now it is!
If you are looking to sell your home, and need to think outside of the box, Door & Key would love to help find the solution that works best for you. We buy homes in any condition, and have worked with many satisfied homeowners who have been in a similar situation. You have options!
Please call today or fill out the form on our website (with no obligation) and we will be in touch with you shortly to talk about how Door & Key can help you sell your property while meeting your financial goals.
Call today (833) 387-7433
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