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A Choice Between Lease Option or Seller Financing to Sell Your House Fast Property advertisements come with several ways like lease option and owner finance especially when the real estate market is soft. During this time, property owners understand that it is now the time of buyers’ market rather than the sellers’ market, leading these owners to be creative in selling and in concessions. Therefore, sellers are turning to some creative financing solutions in order to entice buyers, shorten listing times and create compensation for the tight credit market. The first means that sellers are offering is called the lease option where this arrangement allows the potential buyer to both lease or rent the property and have the choice to buy later on the property being rented. The option money paid by the potential buyer is generally cannot be refunded, however, a part of the lease payments can also be applied on the purchase price.
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The next option that a seller would offer to a potential buyer is called the seller financing, and in this type of arrangement, the seller confirms to finance all or a portion of the purchase for the buyer. In this means of purchase, which also known as owner financing or instalment sale, the buyer pays to the seller for a period of time rather than getting the traditional mortgage or bank loan as means of paying to the owner.
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It is also good for the seller to look at the advantages and disadvantages of these offered options. In the seller financing method, among the pros are that the down payment is usually greater, the real estate taxes, property insurance and upkeep are the responsibility of the buyer, and that the buyer is more likely to act like the owner of the property since they have already bought the property. In this manner of purchase, another advantage comes with greater liquidity in payments through private mortgage compared to lease payments, thereby attracting more investors to pay cash than pay later. An obvious positive advantage of this financing is that the seller earns interest on the amount being financed. Compared to the eviction process which is faster and easier, the con in this arrangement is that it will take time for the seller to foreclose once the buyer becomes delinquent with his or her payments. The next negative side of this method is that the term or time of repayment is longer than on an instalment sale. Among the pros listed under the lease option are that the seller could gain some upside from the increase value of the property if the market appreciates and if the buyer will opt not to buy the property, and in case the buyer misses payments, the eviction process in this term is faster.

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