FSBO financing incentive ideas
All,
I was thinking of a way to try to market to my local real estate investors (or even just any FSBO's), and I kind of took this idea from some of the big builders in my area.
Give me some feedback on whether or not you would be interested in this or even interested in hearing more about it, both as the seller and as a "layman" buyer.
Here's the idea, I go to the FSBO seller and ask if they would be interested in offering paying discount points for any buyer of their home if the buyer financed through my company. I can't offer discount points as a mortgage broker, but the seller can offer to pay them.
What is the benefit to the seller?
I am able to find a lot of loans for all types of clients, where they may have been turned down before. Case in point, my wife and I just bought a new home from DR Horton, and their lending company couldn't get us financed, yet my company did it with out a hitch. So, you are able to sell your house to a wide range of clients.
How much would it cost the seller?
Well, it would depend on how much you would want to pay. But, let's say that you offer 2 discount points. The property is listed a little below market value at $100,000. You get a contract for full price, so the loan amount is about $106,000 with closing costs. You would be paying about $2120 for those 2 discount points, making the sale about $97,880. That's not bad at all, when you look at how much more attention you get on the home when you offer 2 discount points towards their financing.
Since I'm not a lawyer, I would have to find out all the legal issues of doing something like this. But, I don't imagine it would have too many hoops that I would have to jump through to make this work.
What do you think? I think that it would be a pretty good marketing tool for all FSBO listers.
Any input?