“The bank has turned us down!” Disappointed wannabe home owner Art Aquirer said to partner Sheila Shopper. “Oh no, not again.” It means we will keep having to pay $450 a week rent and I’m getting sick of it. Will we ever be able to own our own home?”
At times, bank finance can be hard to get. Art and Sheila’s situation is not uncommon. Do Art and Sheila have other options? Yes, they do. One option is to seek vendor finance rather than bank finance. Very simply the seller of a property lends the money for the purchase of a house to the Buyer.
This method of finance is not new. I have used it myself back in the 70’s of last century. I still remember the seller’s name – Jock Manuel. Jock took a look at what my wife and I wanted to do with the land. He said he was happy to give us a go. We had $500 and Jock “left in” $9,500. Happily we kept up the payments and were lucky enough to sell the land 2 years later for $28,000!
Back to Sheila and Art. How do they find out if a seller will lend them the money to purchase their own place? The answer is simple:- call a real estate company. A good reputable realtor will know which of their clients will leave money in.
The other option is for Art and Sheila to sign up with a company under a buyers agency contract www.goodground.com/buyer agency This option will ensure that they get a wide choice of property to look at and the salesperson will be acting for them as buyers and not on behalf of the seller.
When asking a seller to give you a go, you need to be aware that because the vendor is giving you a chance that the bank wouldn’t, the sellers are likely to be a lot less negotiable on the asking price. Art and Sheila could own property in north of Auckland, New Zealand using the vendor finance method right now. Sellers who are wishing to “move on” and are highly motivated will often be pleased to help Art and Sheila become the new owners.
If you want to purchase your own property anywhere north of Auckland and like the idea of Vendor Finance, contact us at www.goodground.com or phone 09 432 1077.
Vendor Finance. The Seller lends money to the Buyer – Comment by Martin Albrecht, Principal of goodground Real Estate