Buying houses today is almost an oxymoron. As banks continue to withhold financing and property values continue to plummet, most people are electing to stay put and wait it out a little bit longer. However, one real estate venue that is witnessing growth is that of owner will carry.

Buying houses using seller-financed contracts can be a win-win proposition for all parties involved. Sellers can obtain the purchase price because buyers who can\’t obtain bank financing are more willing to pay market value.

Buyers enter into contracts that last between 1 and 5 years. This provides them opportunity to rebuild credit while working toward purchasing the property. A variety of owner will carry strategies exist, but the most popular include seller carry back mortgages and lease purchase option agreements.

Seller carry back mortgages involve buying property from the seller, whereas lease options involve having a portion of rent money contributed toward the purchase price. Both strategies require buyers to provide a down payment to secure the property for sale.

When sellers act as the mortgage financier they can elect to provide full or partial financing. When partial financing is offered, buyers must obtain a bank loan for the balance. Carrying back part of the loan often makes it easier for buyers to qualify for financing. However, buyers will be responsible for making two mortgage payments.

When full financing is provided, sellers retain ownership rights until buyers pay off the financed amount. Seller carry back financing contracts are usually in place for 3 to 5 years, but can be structured to suit the needs of both parties.

Prior to entering into seller carry back mortgages, it is essential to assess the pros and cons. Contracts should always be executed by a real estate lawyer to ensure adequate legalese is included to protect both parties in the event of default and ensure property transfer is recorded through the court.

Lease purchase option agreements provide an alternative financing solution to tenants who want to become homeowners. Lease-to-own contracts are normally in place for 1 to 2 years. A portion of monthly rental income is contributed toward buying the property.

This type of agreement helps buyers establish a track record of paying on time. Buyers must commit to engaging in credit repair strategies and strive to pay all bills on time and in full each month.

Sellers normally require buyers to provide \’options\’ money to secure the property. Once under contract, sellers cannot list the home for sale. Lease options vary by state, so it is recommended to consult with a lawyer to ensure compliance with state laws.

Buyers who qualify for bank financing may find it advantageous to seek out real estate owned by banks or properties offered as short sales. Short selling is offered to eligible borrowers who owe more on their home than it is worth.

Once homeowners are granted short sale approval they must locate a qualified buyer within a short period of time. Otherwise, the bank will commence with foreclosure action. Short sale real estate is typically priced below market value to entice quick sale.

Buying short sale properties can be a time-consuming and frustrating experience, but those with fortitude can buy properties at discounted rates. The process varies by lender, so it can be helpful to work with a realtor experienced in short sales who understand policies of banks.

These are a few options for buying houses in today\’s shaky market. It is imperative to conduct due diligence prior to entering into seller-financed contracts or investing in short sale realty. If a deal sounds too good to be true, chances are it is. Take time to obtain property inspections and appraisals to ensure properties are worth the asking price.

Author Bio: Simon Volkov is a real estate investor who specializes in short sale, foreclosure, and probate real estate. He shares personal experiences with buying houses as investment properties and using creative financing strategies to buy and sell real estate at www.SimonVolkov.com.

Category: Real Estate
Keywords: buying houses, seller carry back mortgages, lease purchase option agreement, short sale properties