Get More By Offering Seller FinancingWritten by Steve Gillman
An example of seller financing: Years ago I bought a rental property, and nine months later sold it for 15% more, without fixing or improving a thing. The easy terms are what sold it. I took $1000 down, and I still get a payment every month, with 9% interest.
Four Reasons To Offer Seller Financing
1. To get a higher price. As you can see from example above, buyers pay for easy terms. From buyers perspective, he gets a place for almost nothing, that renters will pay for. He comes out okay even if he later sold it for less than he bought it for.
2. To get a decent return on your money. The 9% I'm getting is nice, but true return was much higher, since I also sold property for 15% more than I paid, and I get 9% on entire balance. In fact, for a great return without headaches of being a landlord, you can simply buy low for cash and sell high with terms.
Credit where it's dueWritten by Gordon Rant
Over recent years, many people have been happy to take on more and more credit. Mortgages, credit cards, overdrafts, personal loans, store cards, store deferred payment schemes, mail order and hire purchase list goes on. Credit cards have been especially significant. The size of market has increased. Previously, when Consumer Credit Act came into existence, Barclaycard was only credit card issuer. Now there are up to 1400 different cards available. However, big five banks still own over 65 per cent of market share. The personal loan market has also increased.
Research from various organisations has shown that consumers have difficulty shopping around and understanding credit. A government research paper in 2003 found 56 per cent of consumers do not understand terms of credit agreements; 77 per cent find language of advertising confusing; 62 per cent are not aware that many banks charge a fee if they wish to pay off their loan early.
The government is in process of reviewing 30-year old laws relating to consumer credit. The review of consumer credit law is intended to strengthen protection of consumers and create a fairer, more competitive credit market. This review process in UK is being done in parallel with a similar process in Europe for Consumer Credit Directive.