Vendor Financing: Creative Home Selling
When one thinks of buying a home, we tend to think of going to a bank or mortgage broker to arrange for financing. But there are some creative ways to sell a home. For instance, back in the ’80s when mortgage rates were in the double digits, my parents traded houses with another family.
While it’s less common to do that sort of thing in the current market of low interest rates market, vendor financing is a flexible way to look at selling a house. Here’s how it works: instead of going through a mortgage lender, the seller of the house trades their property with the buyer for assets with or without cash. In the case of my parent’s house trade, the houses were worth the same amount so it was a straight transaction.
Like everything, the practice has pros and cons, but sometimes a little creative thinking is the only way to get things done.
