WHY YOU SHOULD SELL YOUR PROPERTY PRIVATE AND HOLD THE MORTGAGE

Smart property owners in this area are doing something very intelligent. The smart money is holding the mortgage on their property sale. Why would you do this? It benefits the buyer and you, the seller. Holding the mortgage when you sell your property can get you more in the sale price, ongoing profits and in many cases even a tax break. “Have a property for sale? You need to look at this’” Real estate agents serve a useful purpose and help many people in buying and selling. They don’t do that for free. When you list your home conventionally and it is sold the total fee is usually 6%. That’s $9,000 on a $150,000 home. This is extra money that you could get in a private deal. So if you sell your $150,000 home through real estate channels you only get $141,000. Then in many cases the sale is con ditional on financing or some other condition. Holding the mortgage especially on a private sale will give you the highest returns. Holding the mortgage, also known as a vendor take back (VTB), also means that your payments to you are guaranteed by the property itself. In other words, if they don’t pay you then you keep the deposit, all payments and its guarnteed by the property value. Often homeowners that hold the mortgage are very happy knowing the payments are guaranteed and they are getting a better interest rate than the bank would pay them on the proceeds of a conventional sale. If your home is paid in full or you have alot of equity in it then this is very smart option to look at. If it is not your primary home you will have a tax break too. Why not keep more of the price and get paid monthly if it’s an investment property and pay less tax all at one time. Investment property will have tax advantages to defer capital gains. “Keep more of the price and get paid monthly and pay less tax.” So let’s look at the situation one of our own staff members is in. This is a responsible, hard working young man and he is looking for a home. If he finds a homeowner who wants to sell he would give them a down payment and pay the balance to the homeowner in monthly payments. If there was ever an issue with the payments the homeowner would keep the deposit, all the payments and the home guarantees all payments. Unlike many renters, a purchaser takes care of the home because they own it. So, it is guaranteed money. The deal is done through a lawyer no different than any other sale. Mortgage rates are going from 3 to 4 % and savings accounts from 1 or 2%. Also from a tax advantage this could also defer capital gains while providing a monthly income. As tax laws change you will have to check with your accountant. You can also hold the mortgage and also sell the property through an agent and pay the 6% or you can find someone that is looking for such a deal and create a WIN WIN situation for you and the buyer. So if your home is paid for or lots of equity and you don’t need all the money upfront this is something to consider. Payments are steady with a guaranteed return and fully secured by the property. Meanwhile if you have a property that you would consider holding the mortgage we have a responsible young man in the office looking for you. You can contact him through us at info@ ThinkWellnessMag.com.