What is Creative Financing?
Creative financing is a way to sell your home that doesn't involve traditional bank financing. Essentially, instead of getting a mortgage from a bank, the buyer of your home would make payments directly to you over time. This can be beneficial for both parties because it allows the buyer to purchase your home at a price that exceeds a traditional cash offer, and it allows you to receive a steady stream of income. Essentially, you are upgraded from a "seller" to a "lender," with the opportunity to make truly passive income using your property.
There are several different types of creative financing, including lease options, land contracts, and seller financing. Each of these options has its own benefits and drawbacks, so it's important to understand which one would be the best fit for your situation.
For example, a lease option would allow the buyer to lease your home for a set period of time, with the option to purchase the home at the end of the lease term. This can be a good option if you're looking for a short-term solution, but it may not be ideal if you need to sell your home quickly.
A land contract is similar to a lease option, but the buyer makes payments directly to you over time instead of leasing the property first. This can be a good option if you want a steady stream of income, but it can also be risky if the buyer defaults on their payments.
Seller financing is perhaps the most common type of creative financing. With this option, you essentially act as the bank and finance the sale of your home to the buyer. This can be a good option if you want to sell your home quickly and receive a steady stream of income, but it's important to understand the risks and benefits before making a decision. You can eve seller finance a home with an active mortgage in place! This process is a calleda "subject to," where the buyer takes over your current mortgage payments, freeing you from any further obligation.
Ultimately, creative financing can be a great way to sell your home if you're looking for a non-traditional option. If you're interested in learning more, we'd be happy to discuss the different types of creative financing with you and help you determine which one would be the best fit for your situation."