How To Sell A House By Owner Financing In Minnesota – The Step-By-Step Guide

We buy houses in Minneapolis St Paul.  With changes to the economy that we’ve seen in recent years, many homeowners are discovering that there are new ways to sell their home that weren’t available before. You no longer have to sell through an agent – you can sell on your own or you can even accept seller financing. If you’re wondering how to sell a house by owner financing in Minnesota , keep reading this blog post and we’ll walk you step-by-step through the process…

Step 1. Determine whether you own the house outright or still have a mortgage

Is owner financing a good idea for the seller in Minneapolis St Paul

To some people its the difference of selling a house of not.  In some states, if you have a mortgage you may not be able to offer owner financing (but you can in other states). So the first step is to determine whether you have a mortgage or not. Many mortgages that people have are written with the due and sale clause in the contract.  Which means if you actual sell you home you need to pay off the mortgage with the funds you got from the sale. If you do not have a mortgage on your house, doing owner financing in Minnesota might be a good option for you.

Step 2. Talk to a real estate attorney for help in crafting an agreement

When you are offering with seller financing, you are essentially acting like a bank. You as the sell should ask for a down payment and then the seller will be paying you regular monthly payments until the house is paid off, and then it becomes their house. There are many ways how this can be structured that the agreement works for both you and the buyer.  Example: You can write up a contract that you sell your house for $200,000 the buyers are giving you 10% down payment that equals $20,000.  You are going to finance the mortgage amount of $180,000 at 6% Interest amortized over 30 years.  But, you don’t want to wait 30 years to get your money, so you state in the contract the loan will come due after 5 years with a balloon payment.

  • Sell house for $200,000
  • $20,000 cash down payment to seller
  • finance $180,000 at 6% interest for 30 years
  • 5 year balloon payment
  • Principle and Interest payments to you each month $1079.19

So make sure you talk to a real estate attorney to ensure that you are protected and obeying all federal, local, and state laws while also protecting yourself! (If you need the name of a good real estate attorney, get in touch with us and we can make an introduction.)

Step 3. Market your house online and offline

Once your paperwork is in place, you are ready to advertise that you have a house for sale. Be sure to let people know that you offer seller financing. Owner financing is very desirable and you can get a little higher interest rate when you offer it. There is no limit to how much marketing you should do – the more you can do, the better.

Step 4. Work with potential buyers

As your marketing captures the attention of potential buyers, work with them to show them through your house. When someone makes an offer on your house, negotiate the price and terms with them and find the middle ground that will ensure a win/win situation. You might be thinking how important is it to get my asking price when selling your Minneapolis St Paul home? Most people offer less then your offering price, so figure this out before you are confronted with it.  Also, do some dew diligence on them to make sure they will be able to pay you back. verify where they are working, how much they make and for how long they have worked there.  Do a credit check to see how they have done with their finances in the past.  Make sure to get a signature from the buyers stating you are going to be pulling a credit report. Sign the papers when you and the buyer reach an agreement.

A step you do not want to skip in how to sell a house by owner financing in Minnesota is to really understand who is buying the house from you.  If they do not continue to make payments, you will be getting the home back and who knows what the condition of it will be like. Make sure to screen your buyers well and determine that they seem like they will be able to purchase the house in Minnesota and continue to make payments.  If you feel good about that move ahead with collecting down payment and let them move in.

Step 5. Collect the down payment and hand over the keys

Now much of the hard work is done in selling your house with owner financing.  You both have agreed on a price and have signed all the paperwork, collected the down payment. Go ahead  and hand over the keys to their new house. In most situations, you will continue to own the house and collect payments until the house is paid off, then ownership transfers to the buyer.

If you’re wondering how to sell a house by owner financing in Minnesota , we can help. We might be able to offer you some advice or even work out an owner financing arrangement where we buy your house from you. Talk to our team at (612) 444-5088 or by clicking here to fill out the form.

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