Owner financing is an effective option which many don’t understand, but it is a very lucrative and valuable tool not only for a buyer but also for a seller, provided that they understand what owner financing actually is. There are many owner financed lands in Hartsel, Colorado you can opt for, but first, you must know all about owner financing.
Typically, buyers get loans from a third party lender, like a credit union or a bank, to purchase a land or a property. However, in owner financing the seller provides the partial or full finances to the buyer to purchase the land or property. Owner financing is also known as seller take-back, owner carry-back, or seller financing.
This financing can be done any time if the seller agrees upon it. If you have a bad credit score or don’t have enough money then you can opt for this option. It also benefits the seller as offering owner financing makes the listing stand out from the rest. It is the best option to use if your land or property isn’t selling.
Types of Owner Financing
Now that you have a better understanding of what owner financing is, let’s take a look at the different types. Following are the 3 main types of owner financing:
Agreement for Deed
This is also referred as Contract for Deed or Land Contract. In this type of owner financing, the buyer is only granted the equitable title and is allowed the possession of the land. The legal title is granted to the buyer once the loan has been fully paid.
Deed of Trust or Trust Deed
In this type of owner financing, three parties are involved – the beneficiary (lender/seller), the trustor (borrower/buyer), and a trustee (neutral third party). The seller transfer legal title of the land to the trustee as a security for the seller pending payment fulfillment.
Lease Purchase or Lease Option
In simple words, this is a lease but with an option to buy. In this a lease agreement is signed so that the land can be leased and the seller signs the option agreement to sell the land at a certain time in future, under certain terms and conditions which sells out the agreement. A lease purchase is the same thing but instead of buyer having an option to buy the land the buyer has to purchase it.
This will give you a better idea about owner financing and you can opt for the option which is better suitable for you.
If you are looking for more details on owner financed lands in Hartsel or to get further details about how owner financing works, feel free to contact Avannah Properties by visiting . You can also connect with them on Facebook.