Question: What are the benefits of seller financing?
Answer:
Seller financing offers tax breaks for sellers and alternative
financing for buyers who can't qualify for conventional
loans.
If you are a seller, the risks you face are the same as those
facing any lender: Is the borrower a good credit risk? Will
the property hold enough value over time to allow for the
repayment of all loans made against it?
You should run a full credit check on the borrower, require
hazard insurance on the property and include a due-on-sale
clause. There also are financing, disclosure and repayment-term
requirements that need to be met. It is wise to consult a
lawyer when putting together this kind of transaction.
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