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Main » 2013 » July » 27 » Seller Financing by LeRoy Wirz Charlotte Olympia Kitty Flats
10:30 AM Seller Financing by LeRoy Wirz Charlotte Olympia Kitty Flats |
| Seller Financing by LeRoy Wirz Do you or someone you know have money locked up
in a long term note with monthly payments? Have you found a use, or need for
that money? Many persons have found themselves in a position where they have
located a buyer for their real estate but the buyer did not qualify for a
traditional bank loan.In this Charlotte Olympia
circumstance, some sellers have engaged in a process called "seller financing".
This means that the seller finances all or a portion of the home purchase price
by taking back a note for that portion of the purchase price. While Seller
Financing is a good means of selling a home in this down, banks not lending
economy, it can become a burden if the Seller needs or wants all or a large
portion of the money represented by the unpaid principle balance of the note. As
a note holder, what are the advantages and disadvatages of selling your
note?DISADVANTAGESWell, first and foremost, once post by haiyan701 you sell the
note the monthly payments to you stop. Secondly, and as important are the tax
consequences of the sale of the note. If the Seller realized a significant gain
on the sale of the home, AND have spread that gain over the life of the note,
he/she may have to declaare the amount of the gain in the tax year of the sale.
CONSULT YOUR TAX ADVISOR. The remaining principle balance of the note will be
discounted due to the time value of money, An example: if I had a 5 dollar bill
in one hand and a ten dollar bill in the other, which would you choose if you
could have the 5 dollars immediately but you would have to take one dollar per
year payments in order to get the ten dollars?ADVANTAGESYou receive the money
out of the note immediately. You no longer have to monitor the property to Charlotte Olympia Kitty Flats be
sure the owner performs the proper maintenance. (Its your security in the event
the borrower does not make his/her payments) You no longer need be concerned
that the borrower will fail to make his/her payments. You can use the loan
payoff funds for other business opportunities, or to pay off debt, fund college
for your children or grand children. You no longer need be concerned that the
borrower has paid the property taxes. You will not have to check the property
records to be sure the borrower has not placed or allowed any liens to be placed
against the property. You do not have to keep detailed records on the interest
paid or not paid or report the interest on your tax returns.These are among the
most obvious pros and cons to consider when deciding whether or not to sell your
note. Your personal circumstance may very well give rise to to other and
additional considerations. Weigh each pro and con carefully.The author is in the
note buying business and offers a no charge evaluation of your note. To receive
an evaluation of your note and answers to some frequently asked questions go to:
sellnotes.leroyw.comTo answer some additional questions and to receive an
evaluation of your note at no charge, you may go to: Sell notes
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