3 Steps to Selling Your Owner Financed House | Marketing, Disclosures and Closing

#OwnerFinancing #SellerFinancing #DeunoYDueno
Grant Teach Me Something - Grant Kemp, Guest: Marilu Gonzales - S3E11

Grant and Marilu discuss how marketing your property to the right market, explaining everything in clear relatable terms and using the right professionals are key to finding buyers, selling to them and protecting yourself with an owner financed property. Around 90% of the market for owner financed properties are Spanish speaking households, understanding the most effective marketing channels and negotiating techniques will increase your conversion rates in this long term passive income strategy.
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SHOW RUNDOWN
3:45 – HOW TO MARKET TO OWNER FINANCED BUYERS.
5:43 – MOST OF THE BUYERS WILL BE SPANISH SPEAKING.
13:53 – USE FACEBOOK TO MARKET THE PROPERTY.
18:00 – HAVE AN OPEN HOUSE.
20:42 – NEGOTIATING ONCE YOU HAVE A BUYER.
23:00 – USE A REALTOR THAT UNDERSTANDS OWNER FINANCING.
30:28 – FROM INTERESTED TO SIGNING ON THE DOTTED LINE.
38:00 – JUST SAYING BECAUSE CREATES MORE TRUST.
43:00 – HOW TO EXPLAIN THE ADDITIONAL COSTS TO THE BUYER.
44:45 – HOW TO FIND AND VET REALTORS THAT DO OWNER FINANCING TRANSACTIONS.
47:00 – USING AN RMLO, CLOSING ATTORNEY AND A NOTE SERVICER ARE KEY TO PROTECT ALL PARTIES.

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When marketing to owner financing buyers, use bandit signs – Owner Financing, Dueno y Dueno (Owner to Owner). Put it in Spanish on the sign. 90% of the calls will be in Spanish so you must speak excellent Spanish. Post to Facebook groups specific to the location of the property. The yard sale groups. Invite potential buyers to an open house and tell them to come in even if they do not like the house because you have other properties. Use the MLS. If you use a realtor, make sure they understand owner financing, which includes completing the contract.
The owner financing process involves many documents and disclosures. Meet the buyer in person to explain the paperwork. You can take them directly to the RMLO to qualify the buyers.
If they have a realtor (around 50% usually do), be able to explain it to the realtor as well.
If it is a wrap where they are in second lien position, explain it to them.
The due on sale clause allows for the primary lienholder to call for the mortgage once the property sells. Explain that the interest rate is higher because that is the going rate of owner financed mortgages. You can also use the car lot analogy where different car lots offer different interest rates because of different credit rating criteria. The buyer will have to pay the down payment, 2 months of escrow reserves and closing costs. Similarly, when you buy a car, you must pay the price of the car plus tag, title and license.
To find and vet realtors that do owner financing transactions, find owner financed properties and call them. If there is a realtor, talk to them, ask who is their RMLO, who is their attorney, are they familiar with the process, what they do for marketing, how many owner finance transactions have they done.
Using an RMLO, closing attorney and a note servicer are key to protecting all parties. The RMLO (Residential Mortgage Loan Originator) will verify all the buyer’s information and provide the QM (Qualified Mortgage), which is compliant with Dodd-Frank regulations. Using an RMLO and attorney protects you as the intermediary because they also go over all the paperwork with the buyer. Use a third party note servicing company to collect the monthly payments from the buyer as they already have the systems in place.
 


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