
With changes to the economy that we’ve seen in recent years, many homeowners are discovering that there are new ways to sell their home that weren’t available before. You no longer have to sell through an agent – you can sell on your own or you can even accept seller financing. If you’re wondering how to sell a house by owner financing in VA , keep reading this blog post and we’ll walk you step-by-step through the process of how to sell a house by owner financing.
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.
While offering owner financing can be a great way to sell a property, if you have a mortgage, the process can be more complicated. You need to carefully review your mortgage documents, consult a real estate professional or attorney to understand your rights and obligations, and take the necessary steps to ensure that you don’t trigger your mortgage’s due-on-sale clause. If you’re in a state where owner financing is commonly allowed or less regulated, it could be a viable option, but if not, you might need to explore other methods or find ways to pay off your existing loan first.
Step 2. Talk to a real estate attorney for help in crafting an agreement
With seller financing, you are essentially acting like a 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. 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
The key to successfully selling a home with seller financing is aggressive, targeted marketing. By making sure the seller financing option is visible in all of your advertisements, utilizing multiple marketing channels, and reaching out to buyers who could benefit from alternative financing options, you increase your chances of finding the right buyer quickly. And remember, there’s no such thing as too much marketing—if you have the resources, the more effort you put into promoting your property, the better your chances of success.
Step 4. Work with potential buyers
The process of negotiating and finalizing a seller-financed home sale is about balancing the interests of both parties to reach an agreement that works for everyone. It’s crucial to communicate openly, be flexible, and ensure that the terms are mutually beneficial. Once you’ve negotiated a fair price and terms, signing the papers and transferring possession of the home marks the final steps in the sale. From there, you will continue to collect payments until the loan is paid off in full, at which point the ownership of the home will officially transfer to the buyer.
Step 5. Collect the down payment and hand over the keys
In a seller-financed sale, the transaction is relatively straightforward once you’ve agreed on the price, signed the paperwork, and collected the down payment. However, it’s important to understand that you will continue to hold title to the property until the loan is paid off, which can take several years. During this time, you’ll collect monthly payments from the buyer and manage the ongoing terms of the agreement. When the loan is fully paid, the title will transfer to the buyer, and the transaction is complete. By carefully structuring the agreement and ensuring all paperwork is in place, you can successfully offer seller financing and complete the sale of your home.