Creative Financing: What You Need to Know to Represent a Buyer or Seller
As the real estate market and financial woes continue, sellers are resorting to "creative financing" to sell their homes and lots. Many buyers today are unable to obtain conventional financing so they too are looking for creative financing to allow them to buy a home.
Creative financing is where the buyer purchases real estate in a non-conventional way. In other words, instead of borrowing money from a mortgage company or bank, the seller may provide the financing or a non-traditional deal is structured in a way that they hope leads to a purchase.
In the 1980's "creative financing" was common in response to double digit interest rates. What we learned from that time is that creative financing is easy to get into but numerous problems arise if they are not done properly. From a legal perspective, it is cheaper to structure the deal right the first time than it is to deal with the problems created by poorly created transactions.
This seminar will go through the basics of the various ways creative financing works, the situations where they should be used, when they should be avoided and the issues that arise with their use.
(2 Minnesota Real Estate Continuing Education Credits)