Myth #1: Buyer Quality

Why do people shy away from creative financing?

It’s all about myths and misconceptions.

There are several reasons people shy away from creative financing. Some of these include the uncertainty of buy quality, a slower closing process and a lower selling price – just to name a few.  

In this article we’re going to look at one of these myths and what the reality is if you are working with a true creative financing expert. 

Myth #1: Uncertainty of Buyer Quality: Traditional buyers with pre-approved mortgages offer a layer of certainty. Creative financing can attract buyers with less stable finances, increasing the risk of defaults or delays.

Truth: Buyer quality depends completely on the due diligence of the creative financing “expert” you are dealing with.  A true expert in this area would never take on a buyer who is questionable when it comes to the ability to make timely payments and complete the sale at the time of cash-out.  Doing so would be unethical, as they would be putting both the seller and the buyer in a financially precarious position. 

Our process is very strict, and we actually turn away a good number of potential buyers.  We only work with buyers who have a sufficient downpayment or a verifiable plan to make downpayments and proof of sufficient income. Most of our buyers are outside the area of financeability, as far as a traditional bank is concerned, and that’s fine by us.  However, all our buyers are in a program that will assure they reach financeability before it becomes time to cash out the seller.  And, if for some reason things go wrong at the last second, we step in and complete the sale. 

So, if you’ve heard that “most creative deals end in default” that’s because it was not coordinated by someone accredited through the Creating Financing Real Estate Association.  With thousands of sales across the country, we have the experience to create win-win situations for buyers and sellers.