It’s not extremely common in the Tampa Bay area, but some sellers offer an alternative to traditional bank financing: Seller financing.
What is Seller Financing?
Seller financing is a way for a homeowner to sell his or her home to a buyer without involving official lenders. The buyer and seller work out their own terms, including how much of a down payment will be necessary and what monthly payments will look like, and they begin the sales process on a home. The buyer pays the seller directly—no mortgage necessary.
Seller financing is fairly uncommon, but it’s not necessarily so because of the risk involved. Instead, many sellers need the full proceeds from selling their home to purchase their next home. People aren’t really familiar with it, either, with most people believing the only way to buy a home is through a conventional lender.
Why Do Some Sellers Offer Seller Financing?
Sellers may offer financing for several reasons, including:
- A desire to minimize carrying costs while they’re waiting to find the perfect buyer
- To help sell their home more quickly
- To get closer to the home’s full asking price than they would if a buyer had a conventional lender
- To collect enough money for a down payment on another home
- To pay down their debts
- To avoid the monthly expenses associated with home ownership
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