Sellers may provide below market financing in an effort to lure potential buyers, induce a sale, or to maintain a façade of higher prices, especially in a condo or planned unit community in a down market.
Developers selling recently constructed property in a community have an extra incentive to maintain high market prices since they are concerned with the sale of multiple properties. They may arrange to pay points to a lender in order to lower the mortgage interest rate for the buyer or provide for certain upgrades or other benefits.
Individual home owners may provide purchase money mortgages, installment contracts, and wraparound loans and other non-market financing. There are times where an extremely credit worthy buyer (due to a wealth of highly liquid assets, stable income stream, and little debt) will receive a below market rate loan from a bank. Investigations need to be made to ascertain what adjustments can be made and supported by market evidence for below-market financing or you run the risk of overpaying for your home.
Any questions or for FREE customized Market Reports, automatic email updates on properties that fit your criteria, or Realtor Referrals, please EMAIL ME or call me at 734-478-9270. -Anwell Tsai
Monday, October 27, 2008
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