Jerry Germansen Associate Broker eXp Realty AZ

Seller Financing is moving properties quickly and at top dollar. The cost of obtaining financing from the banks is over $4,000 for just a $120,000 mortgage loan. It is driving buyers away. Self-employed buyers are not getting loans at all. Forget getting a loan for land or a second home. They are just about not available today. Couple that with the difficulty that buyers are having just getting the banks to agree to lend at all, plus the requirements for documentation and you see the overwhelming popularity of Seller Financed homes.

What does that mean? If you own a property free and clear (no mortgage lien on it) you have a distinct advantage in selling it compared to other homes that are on the market and that are your direct competition. That includes all price ranges too.

It also means that you will not get paid off at the close of the sale. You will receive monthly payments from the buyer with interest. Consider it cash flow income. If you do not need the cash out of the sale, you can earn a lot more interest than if you were put the money into a savings account or certificate of deposit. Banks are paying 1-2% interest. These financing arrangements pay an average of 7%. On a $100,000 bank deposit you would receive $166.67 per month interest. With Seller Financing at 7% you would receive $665.30 per month for 30 years. Sometimes a buyer may only need some time to repair their credit or have a job position long enough to qualify for a loan. In those cases we can have the entire loan balance payable as a balloon payment in 3 or 5 years.

The Seller Financing is accomplished using the Account Servicing Department of the title company. They receive the monthly payments from the Buyer and send you a check. They take care of the accounting and provide monthly statements to you and the buyer. We have the Buyer pay the set-up fee of about $200 for the servicing. They also pay a small fee every month as part of their payment.

You no longer own the property so you have no responsibility for the taxes or the other liabilities of ownership. The taxes and insurance can be collected by the Account Servicing Department monthly. They would then pay the tax bills and insurance premiums on behalf of the Buyer.

What is the risk? If the Buyer pays late there is a late fee added. If they default on the loan, you can foreclose and get the property back and sell it again. You even get to keep all the money they paid in before defaulting. The downside is some risk of damage to the property if you had to foreclose and take it back. The other risk is taking it back after a value decline. We minimize the risk by having the Buyer provide the Seller with a copy of their credit report. The Seller can deny the loan or accept it based on that credit report. Yes there are risks. However, the risk is usually outweighed by the return.

We recently sold 2 homes and have three contracts on another property by offering Seller Financing. All have found a buyer within 2 days! The phones are ringing. Seller Financing does not require an appraisal. They are sold "As IS". One sold for over the asking price because of competition to get the deal by solid buyers who did not fit within the criteria required by a lender for a bank loan.

If you own a property "Free and Clear" you definitely should consider offering Seller Financing. It could quickly get you more for the property, more return on the money you have in equity, and provide a home for someone who is able to make the payments but can't get traditional financing. There are a lot of those people out there that would love to buy your home.

If you have a loan on the property you cannot provide Seller Financing. Some agents structure a "Contract for Sale". Those contracts give equity to the buyer and will cause your lender to call the loan immediately due.

Just make sure you are working with a Real Estate Agent who is knowledgeable in Seller Financing and can guide you through the process. We are experienced and knowledgeable. I have written many Seller Financing deals over the years. Be sure that the down payment is sufficient to cover all the closing costs of commission, title and escrow, so you come away with some cash. It may be the only way for you to dispose of the property in this economic time.

Jerry Germansen, Associate Broker

eXp Realty Arizona

928 632 3906

www.AllofPrescott.com

Prescott Country Club is an excellent community. There are few distressed sales compared to the rest of the market. I found only 20% of property currently on the market is bank owned or a short sale. The Prescott Country Club is a solid and stable community to invest in.

Prices range from the low 120s to over the 800s for site built homes. There are townhomes and condos as well as a section of older manufactured homes at the back of the subdivision. Total housing is over 1300 units.

Being centered around a beautiful golf course built in the 1970s has brought a lot of retirees to the area. We can play year round here. Phoenix residents often play here in the summer when it is too hot in the valley. Play is reasonably priced. You can find a tee time as low as $25 for 18 with a cart.

See more of the Prescott Country Club and even book a tee time at www.prescottcountryclubsite.com.

Agents will find that their clients will love this area of Arizona.

It's almost the time of the year for tax valuations to come out in Arizona. In January everyone that owns property will receive a statement of the real estate tax valuation. Nobody is ever happy with what their property comes in at.

Here is an opportunity for you to be the hero. Make yourself available to your client database for comps in appealing the tax valuation. They will love you for it. We often hear that buyers liked their agent but can't remember the agent's name a year after the purchase. Here is a way to reconnect and make yourself the hero for referrals.

It is relatively easy. Just find comparable properties and provide the comps with a cover letter so your client can take it to the county for an appeal. Most areas have a form for the appeal. I let the owner handle the form and just provide the comps and letter.

In a declining market the local government is usually behind in valuations. They will have a high value compared to what has recently sold.

In the event that your comps actually support the county valuation, I would suggest an appeal anyway. In our area the county will grant a small decrease just for appealing. When you compound that into years in the future it is a fairly large savings.

So use the negative and turn it into a positive marketing tool. Reconnect with your buyers and make them remember you, the guy that came to their aid.

Jerry Germansen, Associate Broker

eXp Realty Arizona 928 632 3906

Creating your place on the web may be more challenging than you think if you are new at the game. It is expensive the hire the work out. So be creative and learn what gets results. You need to have fresh content. Blogging is a great way to create it.

But where do you post your blogs? One way to get results is hyperlocal blogging. That is blogging to a small group effectively. Example:

Trying to get high placement on the search engines for Arizona Real Estate will be difficult without paying a ton for pay per click advertising. It would take a very broad stroke effort by a group to get the search engines to recognize your efforts and at that only over a long time. Yet you could easily be found by the search engines if you blog about your farm area or neighborhood. There is not much competition there.

We are curently watching our placement climb in searches for Prescott Country Club Real Estate with our site www.PrescottCountryClubSite.com This is a local geographic area with over 1500 homes.

Getting noticed by your market is the objective we all are after. This is the way to do it. Focus on your area and become a good resurce for the people that live there. Promote businesses where you have had a good experience. Everyone needs a good plumber and would love to have one that has had good reviews. And the same for local restaurants. Posting their menu on your site may get you repeated hits by people going out to dinner. You will become a resource.

Talk about local events or sports teams too. Promote the event before the date and report on it afterward.

Have links that are of value to your readers. If you are in a seniors community have a Social Security site link. If you are in an area with a lot of kids link to the schools.

These are the tools of the new real estate company and agent. It is the way of the future NOW. With over 78% of buyers searching and finding homes online you need to be the gateway to information for them to survive and prosper. The web is replacing brick and mortar and print advertising. We will look like the travel industry soon...very soon.

JERRY GERMANSEN, Associate Broker

eXp Realty 928 632 3906