Selling That “Hard to Sell” Home

Selling That “Hard to Sell” Home
02-23-08

As a "for sale by owner" seller you can have difficulty selling your home. If you have a "hard to sell" home, you still have some options making it easier to sell your home. There is a saying "even ugly home have buyers". I am not saying you have an ugly home, but when you are having a hard time selling your home, there could be one of several different reasons your home is "hard to sell". Location or the neighborhood could be just one of many.

One option you have is to lower the asking price of your home. You find this option hard to take. Just keep in mind, your home won't sell if it priced above the comparable homes in your neighborhood. If you want the same price the house down the street sold for, your home must be in the same condition.

A better option would be an "assumable mortgage". The buyer would be able to assume your current mortgage without having to quality with another mortgage company. Your house could feasibly sell for a higher price than a similar house without an "assumable mortgage". This could be a definite plus should the interest rate on your mortgage be lower than the current rate. This is a matter you would need to discuss with your mortgage company to see if this option is available to you.

Another option is "Owner Financing". You may have a good buyer who is unable to get a large enough mortgage to purchase your home at this time. If the buyer has funds tied up in an IRA, or has children in their final year of college, they may be willing to pay a higher price, or may find it easier to purchase your "for sale by owner" home with help from a seller's mortgage. A seller's mortgage can be a regular mortgage or a balloon mortgage.

With a balloon mortgage, the buyer will make monthly payments, but must pay the balance of the mortgage at the end of a certain time period. The time period can last from six months to about 3 years. By doing this as the seller, you are allowing the buyer more time to arrange a bank mortgage of his own to repay you. The form used for this type of transaction is called the Balloon Note.

A regular mortgage is usually a second mortgage, which covers the portion of the price of the home the amount the buyer receive financing for. With this type of mortgage, the buyer pays the monthly payments until the mortgage is paid off. This type of transaction requires a Mortgage Bond. The form used to certify the regular mortgage or the balloon mortgage has been paid is called the Discharge of Mortgage.

Another method of owner financing is the "lease with the option to purchase". This will work for the buyer who does not qualify for a mortgage loan. The buyer will rent the property with the option to purchase within six months to two years. If the buyer chooses to utilize this option, he pays a lump sum of 3 to 5% of the selling price to you, the seller. Along with this down payment, the buyer pays an additional monthly sum of $50 to $300 included with the monthly rental payment. This additional money goes toward the purchase price of the home and is non-refundable. A "lease with option to purchase" agreement form is needed for this transaction.

All of the forms mentioned above can be located at any of the major office supply stores or you can download them off the web at audrie.com.
The other options you have would be to consider using a real estate agent or a multiple listing service.

Mark E. Moebius
Miljonair Homes
Custom home builder St. Louis
3451 St. Albans Rd.
St. Albans, MO 63073
636.300.9000