With a title like “The Nation’s Best Home Mortgage Lender,” if you expect me to name one of the largest national home mortgage lenders, such as Bank of America, Washington Mutual, Wells Fargo, Countrywide or Chase, you will be disappointed.
These are all fine lenders. I’ve done business with all of them over the years. But the nation’s best home mortgage lender is one you probably don’t know. Most home buyers and real estate agents have never heard of this well-kept secret mortgage source. Personally, I’ve borrowed several million dollars and never had any problems with this lender.
Purchase Bob Bruss reports online.
However, this mortgage source won’t finance every home purchase. This lender is very “picky.”
Especially if you are a “cash-challenged” or “credit-challenged” home buyer, you should consider this home loan lender. Not every house or condo purchase can be financed using this home loan source, but all you need is one.
Who is the nation’s best home mortgage lender? The answer is: the home seller.
As the nation returns to a more balanced home sales market, with roughly an equal number of home sellers and home buyers, sellers are quickly becoming more reasonable. They realize competitive bidding from frenzied buyers isn’t happening, primarily due to the recent rise in mortgage interest rates.
Today’s realistic home sellers understand they must be flexible, offering every possible sales incentive if they are to (1) sell their home, (2) sell it for a reasonable sales price, and (3) sell it with fair sales terms.
From the home buyers’ viewpoint, especially those with less than perfect credit and/or not much cash for a down payment, they are searching for home sellers who don’t need a 100 percent cash sale.
HOW TO FIND HOME SELLERS WHO WILL FINANCE YOUR PURCHASE
Did you realize more than 50 percent of U.S. homes are owned free and clear with no mortgage? Many more have very small mortgage balances, which can easily be paid off with a buyer’s cash down payment.
Personally, I own one of those free and clear residences. When I eventually decide to sell, I will be only too happy to carryback a mortgage to (a) get the highest possible sales price, (b) create easy financing for my buyer, and (c) provide secure retirement income for my old age.
Experienced real estate agents know the easiest houses and condos to sell are those with easy seller financing. There is always a shortage of such listings.
To find homes for sale with seller financing, buyers must ask. Look for signals such as no existing mortgage, elderly sellers, wealthy sellers who don’t need cash, and sellers who have owned their home many years.
Always ask, “Why is the seller selling this lovely home?” If the answer is, “retirement,” or something like that, it means a seller financed mortgage offer is appropriate.
But don’t always believe the answer received from the listing agent. I vividly remember a rental house I purchased a few years ago where I asked the listing agent, “Will the seller carryback a mortgage on this free and clear house?”
“Absolutely not,” was the agent’s swift reply.
Pretending to be hard of hearing, I then made a purchase offer of 10 percent cash down payment with a 90 percent seller carryback mortgage.
The listing agent was very negative, as she emphasized the “old lady” seller was moving away from the area and wanted cash. I politely reminded the listing agent of her fiduciary legal duty to present all offers to the seller.
Several hours later, the listing agent sheepishly phoned to tell me, “Mr. Bruss, I never thought my seller would accept your offer but when she saw the $1,023 monthly payment she would be receiving from you, she accepted your offer.”
Years later, when I decided to sell that rental house and my buyers wanted to obtain a new institutional mortgage, that “old lady” begged them to take over payments on my mortgage, which they did. She had grown accustomed to that $1,023 payment.
BIG BENEFITS FOR SELLERS OF FINANCING THE HOME SALE
Today is a great time for home sellers to consider carrying back a mortgage for their buyers.
As both a residence buyer who asked for seller financing, and a home seller who loves to carryback seller financing, I’ve learned the primary seller finance advantages are (a) selling the home quickly for top dollar even in a slow local market, (b) earning an above-market interest rate, and (c) the security of a mortgage on a property the seller knows well.
If the home buyer defaults on the mortgage payments, the seller can foreclose and either get paid in full at the foreclosure sale or regain title to sell the house for a second profit.
Home sellers in today’s market can expect to receive at least 6 percent interest on their seller carryback mortgage. Is there any other place home sellers can invest their cash at such a high interest rate with security?
A seller carryback mortgage or deed of trust is one of the best ways to invest home sale proceeds. Every morning I am reminded of that fact.
Way back around 1980, I bought a nice rental house from Ruth Gordon. She was a widow, moving to Rochester, N.Y., to live near her relatives.
Mrs. Gordon accepted my typical 10 percent cash down payment and 90 percent carryback mortgage purchase offer. About five years later, my tenants begged to buy that house from me and Mrs. Gordon’s mortgage was then paid off in full.
I think of Mrs. Gordon every morning because she left behind her bathroom scale, which I use every morning to weigh myself to keep my weight under control. It even has her handmade fleece cover which is now wearing out.
ASK QUESTIONS TO FIND HOME SELLER FINANCING
Most home sellers never think about all the benefits of financing a home sale for their buyer. Savvy buyers who read this article should keep in mind these key points in order to find these home sellers:
1.) Is there a mortgage on this home and what is the balance? Every home buyer should ask this question (except on a brand-new house, of course). Often, the listing agent doesn’t even know the mortgage balance. Buyers should insist on obtaining the important answer. Unless the house is mortgaged to the hilt, there might be a seller-financing possibility. If not, move on to the next listing.
2.) Why is the seller selling this lovely home? Although you might have to leave out the word “lovely,” this is a key question for any resale home purchase. The answer shows the degree of seller motivation.
Or buyers might ask, “If the seller obtains an all-cash sale, what will the seller do with the cash?” Will they earn at least a 6 percent annual interest income, as I am willing to offer?
Of course, if the seller needs an all-cash sale, such as to buy another home, that is not a seller-finance candidate. Move on and buy another house.
3.) Sellers of vacant houses are often highly motivated. When you discover a vacant house or condo, especially if it has been listed for sale at least 60 days, the seller is probably highly motivated to sell and will listen to any reasonable terms, especially a seller carryback mortgage.
HOW TO CONVICE HOME SELLERS TO FINANCE YOUR PURCHASE
Even when the circumstances are right, such as the seller has no need for an all-cash sale, there is often an unspoken reason the seller might not accept your purchase offer.
That reason is the fear of foreclosure if the buyer doesn’t make the payments and the seller will get the house back.
In that situation, I politely inform the seller that is the best thing that can happen. If I default, I explain the seller can foreclose on me, wipe me out, and either get paid the mortgage balance in cash at the foreclosure sale or wind up owning the house again to resell for a second profit.
When I really want to buy a house, I’ve even resorted to desperate measures such as (1) offering to prepay six to 12 months of mortgage payments at the closing, (2) giving the seller a year’s worth of post-dated checks so the seller can deposit a check on the first day of each month (my personal favorite), and/or (3) giving the seller a copy of my credit reports and FICO (Fair Isaac Corp.) score to prove I am credit-worthy.
SUMMARY: The nation’s best home mortgage lender is the home seller. Home buyers won’t find an easier lender who usually requires no credit report, no employment verification, no appraisal hassles, or any mortgage underwriting. Sellers need to be reassured they have a secure investment and a high interest rate not easily obtainable elsewhere with safety. Not every home can be bought with seller financing. But all you need is one.
(For more information on Bob Bruss publications, visit his
Real Estate Center).
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