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Frequently Asked Questions
Fast Sale By Owner at Full Appraised Value
About the Seller Assist Program
Why should I sell my home using your methods?
How does Sellers Select
Realty Services Charge for their Services?
What makes the Seller Assist Program work so
fast?
Why do so many
buyers call on my home using your Seller Assist Program?
Do I have to hold on to the Owner Financing for any amount of time?
Should I go ahead and list with a realtor anyway?
What if I try to sell my home using a local mortgage company for funding?
Must I use your service if a
buyer is already approved with a mortgage company or bank?
What are the interest rates for these "Problem Credit" buyers?
What is the down payment
expected to be?
What costs are involved in working the Seller Assist Program?
If I already have an appraisal, can you use it?
Don't Buyers usually pay
for the appraisal? Why should I pay for it?
Is Sellers Select realty Services an Agent or a Consultant?
Why should I sell my home with your methods?
We give you a way to offer owner financing on your home. This is the one big concept that will line buyers up for your property. The problem with owner financing in the past has been that home sellers 1) have not wanted to hold the note and collect payments over long periods of time or 2) need all cash at closing to do other things.
This is where we step in. We will pay you that cash at closing. We do this by buying the owner financing that you arrange with your buyer. You never have to hold the note, or collect payments. You get all cash at closing from us. Of course we have to make money too, and we do that by holding back a small amount from the cash we give you for the note. So you get almost all your owner carried amount at closing plus you do get to keep the down payment.
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How does Sellers Select Realty Services Charge for their
Services?
We never charge you or the buyer with up-front fees. We are paid only when and if your home sells using our Seller Assist Program. Our "fee" is included in the "discount" on the note, meaning that the note is purchased at less than its face value. You are never out of pocket any money for our fee.
Because you will sell your home at full-appraised value and never have to negotiate with the buyer on your price, you still net at closing, more than you would from selling by any other method, even after the (approximately) 7% discount. Have a look at How the Seller Assist Program Stacks Up.
If you are not satisfied
with the offer for the owner financing you do not have to go through with the
transaction. You stay completely protected throughout the transaction.
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What makes the Seller Assist Program work so
fast?
You are able to offer “Owner Financing” in your advertisements and on your yard sign. This will more than quadruple your response. Many buyers need the help that owner financing can give them. They will actually compete most of the time to buy your home. Often times, so many people call on your ad that you must have showings to groups of buyers at a time. This spurs on the competition and helps sell your home fast and at full-appraised price.
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Why do so many buyers call on my home using your Seller
Assist Program?
Many of these potential buyers have some sort of credit or income problem. Two thirds of the population has had their credit damaged or even destroyed from such things as a divorce, medical problems, and job changes. They cannot get financing through traditional mortgage companies or banks. Many times these people have fixed the problem and make great risks for our investors despite the fact that their credit is going to be a problem for them for years to come. We know that these and other types of families, such as self-employed people, deserve homeownership and will make their payments faithfully. This program helps hundreds of buyers like this every year.
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Do I have to hold on to the Owner Financing for any
amount of time?
No, we will purchase the Note and Deed of Trust (Mortgage) at closing. You never have to collect payments, nor are you responsible should the buyers stop making payments down the road. There is no recourse back to you from the financing transaction. Of course, this does not apply to possible liability on your part, should you fail to make the required disclosures. But we are here to help you with that too.
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Should I go ahead and list with a realtor anyway?
This may be a good idea for some homeowners. A realtor can sell your home and work with the mortgage companies much easier than you can. Unless:
- You need a fast close (within 60 days).
- You want top dollar for your property (full appraisal minus the discount).
If these two items are important to you, then you should continue to sell the home yourself but with the better ammunition and the solid home selling techniques you will get from the Seller Assist Program.
If you elect to have a Realtor sell your property for you, we suggest you use our Flat Rate/Low Fee Desert Area Listing. Your listing will advertise Owner Financing, which has a very powerful effect on Buyers. We will work with the Buyer's agent. We are that extra push that gets your ad answered and helps your Realtor get many more offers on your property. Plus it will still save you money. Look at How the Seller Assist Program Stacks Up.
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What if I try to sell my home using a local mortgage company for funding?
You can of course do this but don't hold your breath waiting for a buyer who can "Fund & Close". There are many problems that plague the old ways of selling a home such as:
1) The homeowner not knowing how to "sell" and "close" the sale. It is not as easy as most think to sell a large item such as a house. Unless you have had previous sales training, such as a realtor receives, you may join the 80% of all homeowners who start out trying to sell their homes themselves and end up turning it over to a Realtor.
2) Once you do put your home up for sale, every potential buyer will ask that you come down off your price and usually the offers you get will be at 80%-85% of the asking price. Many will be lower than that. You will have to negotiate back and forth ending up at a national average of 85% to 90% of the Appraised value. Plus take into account the difficult and stressful seven months it takes the average homeowner to sell his or her own home in the traditional way.
3) Once you do find a potential buyer with whom you have agreed a price, you still have to send them off to a mortgage company to obtain financing. This can be a nightmare; almost half of all applicants that get to this point will fall through and not fund. The hard part is that you don't find out about it until 30-45 days after you have a signed contract with the buyer. Mortgage companies give out pre-approvals to anyone who walks in the door, but they still have to go through all their paper work to really determine if they will give them a loan or not.
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Must I use your service if a buyer is already approved
with a mortgage company or bank?
No, you are not under any obligation to use our program should you sell using a traditional method. We hope you sell your home as soon as possible no matter what method you use. But you will find that our program will create the interest and in-home showings that can make any type of buyer put a contract on the home faster than any of the old traditional ways. Usually a mortgage pre-approved buyer will want to negotiate your asking price down. If you can live with the offer then great. But at the same time he may be competing with a buyer wanting to buy your home using our program. The Seller Assist program can only help you make the best possible deal.
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What are the interest rates for these “Problem Credit” buyers?
Most of the rates you will receive from us will be between 10.50% and 12.50%. These rates are between those for "perfect credit" lenders and "bad credit" lenders. Typical "bad credit" rates are 8% to 10% above "perfect credit" rates. Our investors are not "loan sharks." Most of our investors are large insurance companies whose names you would recognize. However, to avoid policy holder issues, they prefer to buy these owner-financed loans through subsidiary companies.
We will give you an interest rate that can be placed on your owner financing that is more than competitive with other lenders who specialize in problem credit buyers. We will give you a rate that will maximize the cash for the note you sell us. Since you are the seller and you are creating the note, any interest rate you decide to put on the note may still be marketable to us but will incur a greater discount. We will give you the best possible note structure for any given buyer. Most owner financing will be purchased at 93% of the face amount of the loan. You get to keep the down payment. Some buyers with really poor credit may need your assistance in taking back a small 5% or 10% note, but with whom you go and the note structure is entirely up to you.
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What is the down payment expected to be?
We like to see 5% to 10% down. We have many different options within the Seller Assist Program for each type of problem a buyer may be facing. The down payment must come from the buyer and none may come from you. However, the buyer may borrow any amount above 5% from relatives etc.
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What costs are involved in working the Seller Assist Program?
There are three charges that you will be responsible for paying as you go, but can be reimbursed up front or at closing from the buyer.
1. Classified Ad: The first cost is that of the classified advertisement we recommend. Most sellers only need run the ad for 2 weeks before a buyer is found. In some harder to sell areas you may need to go 4 weeks. Allow about $200 for the ad.
2. Credit Reports: These are paid for as they are pulled by us at a cost of $30.00 each. However, you may also use your own source for pulling credit. It must include all three bureaus and have each bureau's risk scores included.
You may also just mail in the Loan Application and Pre-Approval with a $30.00 money order to Sellers Select Realty Services, and we will pull the report. The buyer pays this $30.00 fee at the time they make an offer on your home. You should collect this amount in a check separate from the earnest money. If you elect not to have the earnest money check from the buyer made out to you, have it made out directly to the Escrow/Title Company.
3. Full Appraisal: A full appraisal must also be ordered. We can use several of the nationwide appraisal firms. We recommend GAC because of the extra mile they go to ensure fast appraisals and their willingness to review ant appraisal that is cause for concern or dissatisfaction.
We receive no fee from GAC. All appraisals must be arms length transactions. We do many appraisals through GAC and they have opened a special account to process your appraisal. Simply call the 1-800 number and ask to place an order for an appraisal through account 90-2500. They already know what type and kind of appraisal we require. They will arrange to collect their fee from you COD. They accept money orders and credit cards. The charge may vary according to distance from a local office. Usually the fee is $300 to $350. They contract with a local appraiser who is familiar with your city and home prices. They have affiliate appraisers in all areas of the US.
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If I already have an appraisal, can you use it?
We may be able to use it, or we may need to have a review made on the appraisal. Let us know as soon as you have a buyer ready and we will proceed from there as to what we may be able to work out.
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Don’t Buyers usually pay for the appraisal? Why should
I pay for it?
It is in your best interest to have an appraisal because with the Seller Assist Program you can sell your home at its true value, the appraised price. If you do not have an appraisal, and one is not absolutely required until you have a buyer in place, you could suffer a great financial loss. For every dollar you don’t know that your home is worth, you lose. We have seen homes that realtors have done comps on that appraised at thousands of dollars higher than expected.
Once you accept an offer on your home, it is too late for you to change the price. Your appraisal could come in much higher but the buyer will hold you to the original contracted price. Saving even $2,000 to $5,000 is worth the investment of $300 now. In any case, you can contract for your buyer to reimburse you the cost of the appraisal in escrow.
Tell the buyer: "This is customary. If you were getting your own loan, you would pay for the appraisal."
What's more, with an appraisal in hand, you are able to tell your buyer: "Hey, this is what the place is worth. Why should I take less, especially since I am giving you owner financing in the deal."
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I already have my home listed with a Real Estate Agent, can this still work and will it cost me too much?
If your agent has not found a buyer for your home within 30 days, then you may find the agent asking you to consider a price reduction. Before you do that you should try every possible means to get your full price and that means using our Seller Assist Program with the real estate agent. Instead of reducing your price, after the appraisal comes in you may find you need to increase your price. That’s right, increase it to the real appraised value.
Once you have the home priced at the right number, have the real estate agent include owner financing into the MLS listing. Have it placed on the first line of the Remarks Box on your MLS listing page. The real estate agent will also include it in another data area of the listing, so that other realtors searching the MLS for owner financing offers will come up with your property. This will automatically increase the numbers of showings your home gets.
As far as extra costs go, you have already agreed to pay about 6% to the real estate agent. Even after adding our discount/fee, this is still a better situation than allowing a price reduction on your home, which will usually cost you 15-18% with the real estate agent’s commission included. Look at the comparative scenarios at How the Seller Assist Program Stacks Up.
You may still have one more upside advantage. With the increase in showings, you still may find a buyer who has his own mortgage financing in place and you will only incur the real estate commission and any price negotiation with the buyer, which is minimized by the fever of competition from other buyers. So whether you have your home listed or not, you will save money and time selling your home with our Seller Assist Program.
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Is Sellers Select Realty Services an Agent or a Consultant?
California Law requires us to be very clear on this. We are a licensed California real estate broker. However, in the Seller Assist transaction, we act as a Consultant. We do not act as an Agent. We require all our sellers (and their buyers) to sign an Acknowledgement of Non Agency Relationship to evidence their understanding of this fact.
An agent is someone who represents, or acts on behalf of, someone else (the principal) in a transaction. Sellers Select Realty Services takes no action on your (or your buyer's) behalf, and does not represent either buyer or seller. Unless you choose our Flat Rate/Low Fee Desert Area Listing, in which case we will be your agent, our role is limited to 1) helping arrange the purchase of the obligation created by your owner financing and to 2) providing you with information relative to documenting the transaction.
Although agents typically get paid by commission, the fact of being an agent is related to the nature of actions taken, not to the nature of the compensation. The simple concept of fee for service is used by doctors, dentists, attorneys and other professionals but rarely real estate brokers. A consultant may charge by the hour or by the result. Thus attorneys may charge an hourly fee or, in the case of litigation, a contingency fee based on the outcome, or a flat fee. With the Seller Assist Program, our fee for service is related to the sale of the Note and Deed of Trust created and sold by the seller. It is not related to the sale of the property itself and it is not paid by the seller out of pocket.
Although the field of real estate agency is heavily documented, standardized forms for real estate consulting do not exist. However, we take this matter very seriously. This is why we use the Acknowledgement of Non Agency Relationship document mentioned above and to be found in Seller Assist Program Documentation.
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How is it that you say your service costs
only a little when the amount is more than most Realtors charge?
In fact, it really costs you less to work the Seller Assist Program than any other means of selling your property. You see, with our program you get to sell your home at the Full Appraised Value and our discount and fees are taken from that amount. After they are subtracted you end up with an amount that is no worse very often better than if you had accepted a negotiated price from a regular mortgage money buyer. Look at the comparative scenarios for how the Seller Assist Program stacks up against the standard listing process.
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Sellers Select Realty Services 23225 Tamyram Rd Sky Valley CA 92241 Tel: 760-329-3650 Fax:760-329-1265