I was recently listing a home for sale on ZIllow with seller financing. They would not put up my listing because it violates their policy on financing. I have listed before on Zillow with financing. Has anyone else run into this recently? What were you work-arounds? I decided to re-list with different wording.
Hi Drew, I'm no surprised. Part of the motivation for congress writing Dodd Frank was to clamp down on the investors offering preditory terms re rent to own and seller financing and that view has carried into craigslist rent to own adds and you say zillow. I do / done many rent to own (contract for deed) and a few seller finananced deals where I keep the note.
Why not in parallel use a flat fee listing on MLS too? Often $500 + a small percent of the listing price. Well worth it IMHO given poor performance of RTO/seller financed zillow listings. Buyers don't look for financing and its foreign so they don't jump on a forsale listing on zillow.
I've had the best (only) luck with zillow rental adds, starting with the pitch; rent to own, live in a great home while you pay off owning it. Down payment amount varies and more you put down the highre you will be in the queue of applicants, also down payment varies per your credit...
Dodd Frank IS in play!!
I can't give a tutorial re how to originate a note today, selling a house with financing in just one post. Its doable, I've done it many times. And I did not use a MLO/LMLO who would eat 1% to 1.5% of the selling amount. Mainly LMLO's are rare, almost non-existant.
Post Dodd Frank sellers have continued the same bad practice of selling houses to occupants with financing at selling prices that are way high, can't be justified via any type of 3rd party valuation (appraisal, zestimate, tax value, even recent sales in the same area). Plus new folks do a very poor job of screening the buyer for Ability To Repay (ATR) which involves pulling full doc and calculating the borrowers DTI, honest income, honest debt payments, prior debt payment histor (FICO) etc etc.
Plus shockingly (or shocking to sellers) if you bought this investment house, fixed it, then are selling with financing you are selling "inventory" and y9ou owe taxes on the gain in the year of sale, you are NOT able to use installment sale to spread out paying taxes. I know gurus who tout the contrary and I'm 100% certain they are wrong. To qualify for installment sale you must selling an investment property, it was a rental for at least a short period. For me >12 mo for long term cap gains. IE rent to a tenant for >12 mo, dating before marriage, no late payments then with a down paymetn (long story here) I'll sell on either a contract for deed (typically mobile homes on land) or a note and mortgage (regular nicer houses). But I pull full doc, screen screen screen the buyer. Newbie sellers don't screen good enough. Think of this; if the buyer can't qualify for a bank loan,,,, why the heck should you stick your head into a note and mortgate noose?? At least a contract for deed is just an eviction. But in the South contract for deeds are not liked by the RE attorneies, where up north CFD has state statute validity (which states?). Join your local REIA to know more.
etc etc etc. Good luck. BTW connect with me I like to help folks through subject to or seller financing since theirs so many problems one needs to get right. I have training pdfs I don't mind sendiing out.
I'm not sure why you think that me offering seller finance means that I am a preditory lender. I follow Dodd Frank, I use an RMLO, I have a title company close the sale and offer title insurance. I provide houses for people that might not get other opportunities. And I provide solid returns for my private lenders in the process. The question was, has anyone noticed that Zillow is restricting "owner financing" in the listing? I have done it in the past and never had an issue until recently. I also, just this morning saw that someone was offering financing in a post. So maybe it was just the wording.
@Drew Poniewaz I just mentioned a range of reasons why zillow and craigslist delete seller financing ads. I do SF/CFD myself. I post things for the general public to read for a deeper understanding not so much a reply to you. :) There's so many Gurus pitching this and that without mentioning the risks to them and to the buyers.
So glad to hear re your business model being fair to the buyer.
I did mention that the main area where buyers get taken advantage of is re the price.... Dodd Frank corrects this by requiring the price be supported by an appraisal or some basis. I use zestimate,, but tax value is good too. Typically SF'ers pick an astronomical price out of thin air. Again I'm mentioning for future readers to see that price should not be out of thin air.. This is one of the reasons why zillow/CL delete or prevent seller financing / rent to own ads from being posted. I have better luck with posting in the zillow rental section; rent before you buy, live in a great property while you get yourself ready to finance a great home....
Our business model; protect the buyer or tenant at even our own expense. We really do want our SF buyers to be successful and pay off the note. We have life time losses to uncollectable rent/financing payments to prove we back up this claim. There's too many investors who are front page news in Northern states re CFDs gone bad and Texas where lease options went bad and the state enacted buyer protections...
Take care to all. Curt