News and Articles

June 18, 2010

Selling In Today's Market

While it is indisputable that tax deed property auctions are a great way to achieve return on investment and get your hands on properties at deep discounts, many people are currently steering clear of them because they fear that they will not be able to sell the properties once they have ownership. This is not an unfounded fear. After all, we are currently operating in a “buyers market” and there are far more homes for sale than there are buyers for those homes. So does it make sense to invest in tax deeds right now, knowing that you will be competing against many, many other sellers that may be just as motivated as or more so than you? Of course it does. Because you have an advantage that most conventional home sellers may not be in a position to exercise or even aware of:

You have a seller-financing option.

Since you purchased the property via a tax deed auction, at this point you own that property free and clear – assuming of course, that you took the necessary steps to clear the title, usually via a“quiet title action”. This means that you can sell that property at essentially whatever price you wish and on whatever terms you wish, making seller-financing an ideal option for you. Many people with decent incomes have had their credit scores demolished in the past few years. As a result, while they may want to purchase a home, between their low scores and the newly-implemented 20% down payment that is becoming increasingly popular with lenders, they may not have the option. You can charge a healthy down payment, a decent interest rate and a higher price for the home and it will be completely worth it to these buyers to pay in order to get financing for the property and get back in their own home. You can collect a monthly payment on this note, which they will pay just as they would on a conventional mortgage.

You should note that many property owners who do seller-financing do not want the hassle of collecting on these notes for 15 to 30 years. If you feel this way, you can sell the note to a note-buyer at discounted rate so that you still garner a profit and they collect the entirety of the note over the term of the loan.