SELLER FINANCING BOOST 1/17/2009
Saturday, January 17, 2009
SELLER FINANCING BOOST
Billionaire Richard Branson’s Virgin Group PLC bought a company that specializes in intra-family and seller-carryback financing, Circle Lending LLC. Real estate columnist Kenneth Harney suggests that this is a likely harbinger of more uses of seller financing in real estate sales.
In the 1980s, when mortgage rates edged toward 18%, seller financing was one of the few basic fuels for the real estate market. Sellers could take back a portion of the purchase price, generally in the form of a note and second trust deed, and then either hold the note and collect a steady stream of income or sell the note at a discount to an investor who would appreciate the income stream.
One of the reasons that seller financing didn’t increase in usage beyond the early 1980s was that the market for seller financing notes was never made adequately “efficient.” Several small companies began to dot the lending landscape, and they had inadequate groups of investors with which to work. A larger system, streamlined by computer programs that very effectively match the needs of sellers and investors, could make this a much more viable approach to home selling. And, given the interest of people like Richard Branson, that is precisely what we may see very soon. Need help? Just call Lil at 530-550-5007 and visit our web site at www.alltruckeehomes.com.
The Schaller Family Realtors® are Associates of Dickson Realty.
Billionaire Richard Branson’s Virgin Group PLC bought a company that specializes in intra-family and seller-carryback financing, Circle Lending LLC. Real estate columnist Kenneth Harney suggests that this is a likely harbinger of more uses of seller financing in real estate sales.
In the 1980s, when mortgage rates edged toward 18%, seller financing was one of the few basic fuels for the real estate market. Sellers could take back a portion of the purchase price, generally in the form of a note and second trust deed, and then either hold the note and collect a steady stream of income or sell the note at a discount to an investor who would appreciate the income stream.
One of the reasons that seller financing didn’t increase in usage beyond the early 1980s was that the market for seller financing notes was never made adequately “efficient.” Several small companies began to dot the lending landscape, and they had inadequate groups of investors with which to work. A larger system, streamlined by computer programs that very effectively match the needs of sellers and investors, could make this a much more viable approach to home selling. And, given the interest of people like Richard Branson, that is precisely what we may see very soon. Need help? Just call Lil at 530-550-5007 and visit our web site at www.alltruckeehomes.com.
The Schaller Family Realtors® are Associates of Dickson Realty.
