What’s really the difference between a traditional real estate deal and a creative deal?

Think of it this way…

In a typical real estate transaction, there's kind of a friendly competition that happens, right? The buyer comes in and the buyer says, “here's my offer”. The seller may just accept the offer, or they may decide they aren’t happy with the offer and make a counter offer. Then, they go back and forth a little bit. It's kind of a friendly, but competitive attitude. That's a typical real estate transaction. Each party, buyer and seller, has a realtor and they're trying to get the best deal their respective party.

Working with a reputable real estate investor is different. A real estate investor comes in and says to the seller “what terms would work for you?” What terms would make you agree to sell this property? Most sellers may not know how to answer this question at first.  It’s not part of the traditional thinking of selling a home.  That’s ok.  After some discussion, it’s pretty straight forward to come up with the terms that would work. Selling price, down payment options, length of the deal, etc, are all open for discussion.  Based on those terms, a deal is crafted that works to the benefit of both parties. There's no competition involved. Both trying to figure out what works for everybody.  You're on the same side and you're not working in any way against each other. This gives both the seller (homeowner) and the buyer (investor) confidence that there will be no surprises during the deal term.  In a creative deal, the seller will take home more money, but that’s realized at the end of the term.

Creative financing is, just as the name suggests, creative. It is able to turn almost any real estate situation into one that is more beneficial for all parties, compared to what a traditional deal can accomplish. Creative deals can help people who have a lot of equity in their property, it can help people who are behind on payments, have little equity and even sellers who are underwater (what is owed is more than the property is worth) or facing foreclosure.

Traditional real estate deals still have their place, and always will.  When a large percentage of the funds are needed immediately, a traditional deal is often the best option.  Real estate agents excel at making these deals happen and satisfy the needs of the majority of people.  But, in the cases where a traditional deal doesn’t work for you, a creative deal usually will.