Your Resource for the Note Market In USA and Canada
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What is a simultaneous closing?
The phrase "Simultaneous Closing" is used to describe transactions that occur when the seller is carrying back a note, as payment for their property, with the specific intention of selling the note for cash. In other words, "Simultaneous Closing" just means, during an escrow closing, that there are two (2) separate closing transactions happening within minutes, a day of each other, or within a week of the first closing.
In Real Estate industry this technique is used when traditional financing will not work, or is not desired for some reason. It is a process by which someone selling their property can carry the note or take back the note on the property and sell the note at the same time they close on the sale of the property.
Using this strategy, the seller creates the note, much like a bank would do, and Serecin & Associates purchases that note at, or right after closing (simultaneous closing). All notes are purchased at a discount depending upon a variety of factors, including property type, size of the note, interest rate, note terms and especially the credit score and profile of the buyer. We help structure the transaction to minimize the discount
Why use a simultaneous closing?
If you ask someone who is trying to sell their property if they would consider using owner financing to help sell the property, they would give you two reasons why they would not want to do owner financing. The first reason is that they do not want to be a bank and collect payments. The second objection to using owner financing is that they need more than just the down payment. Using a simultaneous closing would eliminate both of these objections.
What are the advantages?
Owner financing will instantly multiply
the number of eager buyers for your home.
It gives you the ability to sell fast, because
you're offering terms rather than cash.
Temporary Seller Financing is not meant to replace traditional, conventional lending… but is designed to be used as an additional alternative method of financing, when the conventional approach will not work or is not desirable for some reason. For example:
- When the buyer does not "bank qualify" because of a high debt to income (DTI) ratio, or is newly self employed, or has a low down payment, etc.
It will be easier for someone to sell their property because the qualifying criteria is easier for the buyer to qualify. Offer owner financing, then sell the note at the closing table.
There are so many ways people can
benefit from owner financing. Home sellers
can sell a house quickly on their own. Real
estate agents can sell listings faster. Owner
financing solves problems with homes that
don't qualify for bank loans. The zoning may
not be right. Or, there’s an easement or
access problem.
We recently visited with a home seller
who had a house located on a street not
paved. The bank wouldn't loan on that
house because of the unpaved street. The
sellers offered owner financing, and the
house sold immediately. When the sale
closed they instantly sold their contract for
cash.
Developers and contractors can use
owner financing to sell property fast.
Raising cash is no problem. Just sell the
contracts.
You are a rehabber and want to sell your properties fast so you offer owner financing to bring in numerous prospects.
Owner financing can solve problems with
couples involved in divorce who need to sell
a home. When the home sells the contract
can be sold for cash. The proceeds can then
be divided between the couple. This is
something that can be useful to attorneys
who handle divorces. It can also work for
people dissolving partnerships.
The closing costs using owner financing will be considerably less than using conventional financing. The only true costs are a credit check, appraisal and title work. There will be some other minor costs such as documentary stamps. On a percentage basis the closing cost are considerably less.
The home buyer benefits by getting
terms that are favorable. They have cut out
the hassles of bank red tape.
The bottom line is owner financing
solves more problems, and gets homes sold
faster than any technique we know of.
We’ve explained the benefits and told
you how it works. Let's talk about making
contact with a contract buyer, with the idea
of selling a newly created contract from the
sale of your home.
- When time is of the essence! We can generally close within 30 days of getting the full document package.
How it works?
An Example of a Simultaneous Closing
Your goal is to create a contract that has
high cash value, that you can easily sell.
Lets show you what a high cash value
contract should look like. We will call this
example one: The Quality Contract.
Lets pretend you have a home you're
going to sell for market value of $100,000.00.
Lets say you find a good buyer who can put
down $20,000.00. The buyer is going to have
a 20% equity position at the very beginning.
A contract buyer likes to see that. The more
equity your buyer has at the start, the better
for you when you sell the contract. Lets
assume the interest rate you charge on this
contract is 10%. Now, market rates could be
lower or higher, at the time you’re reading
this. The 10% rate is only an
example. The remaining balance of
$80,000.00 is amortized over 15 years. This
means the buyer will be making monthly
payments for 15 years of $859.68. Here’s
what the contract looks like.
Sales price of the house................$100,000.00
Down payment.................................$20,000.00
Remaining balance amortized
over 15 years....................................$80,000.00
Basically, a Business Note Simultaneous Closing is very similar to liquidating any other note, except the note has no seasoning (it is brand new). Assuming that we are provided with all of the terms of the proposed note and an accurate bill of sale, we will issue a Letter of Intent that states that we will purchase the note for some given amount after the business closing, provided no changes have been made. This assures the seller that the note can be sold and for how much, even before the business closing. We can provide a check to the seller very soon after the business closing, often right at the business closing table.
If you're selling other property like
apartments or commercial real estate, a
contract buyer would want the following
ratios: Multi-family units, and apartments
need to keep loan-to-value at about 65%
maximum. It can go lower but 65% is
acceptable to a contract buyer. If you're
selling commercial property, your loan-tovalue
should be around 60%. For vacant
land, or lots, loan-to-value should be no
more than 50%.
If you would like more information on how our program may help you sell you property please complete the following information. "T o Recieve a Copy of Sell Your Home Fast In Good Or Bad Markets "
