Frequently Asked Questions
We’ve put together a list of the questions that come up frequently and their answers to help you understand the process better
What Do You Do?
We buy nice houses in great areas on terms and usually rent them out to qualified renters. For other houses, sometimes we fix them up and sell them, or offer them for rent at a discount to provide affordable housing. It all depends on the property. For sellers we provide a fast, hassle free way to sell your home at a great price.
Because interest rates have gone up, your mortgage just might be your greatest asset. Low interest rate loans have significantly lower monthly payments that in most cases allow us to still cashflow the property as a rental. We’re buying great houses with low interest rate loans as cashflow properties.
What Are The Benefits of Selling on Seller Financing?
When you sell on seller finance you get the same benefits that a bank would get, and sometimes we’re even able to pay more than the house is worth if the terms are favorable. You’ll be protected with Note and Mortgage documents prepared by an attorney and filed on public record. If your goal is reliable, consistent monthly income, selling on seller finance could be one of the best possible ways to achieve that goal. We send a check every month directly to your account and you have zero responsibility toward the house, just like a bank. If the roof is damaged or the furnace breaks down, that’s 100% on us. It’s a lot like collecting a dividend check on a stock, except you get paid monthly, the dividend amount doesn’t change, and the underlying value of your investment doesn’t go down.
What Are The Tax Advantages of Selling on Seller Financing?
This is a great question for your tax advisor! You may be eligible to defer your tax gain on the sale of a property through installment sale tax rules, but check with you tax advisor to see if it applies in your specific situation. Many of our sellers see significant tax savings from selling on seller financing.
How Am I Protected As The Seller?
As the Seller in these transactions, you protected a few different ways. First, we close with a reputable title company and all paperwork is approved by an attorney and an underwriter. If you have seller financing on a property after closing an attorney will write up a Note and Mortgage which details how much we owe you and the repayment terms. These documents are recorded on public record at the local county recorder’s office.
What Kind of Offer Will I Get?
The kind of offer we make you will depend on how much equity you have in the home. If you bought or refinanced the home recently and don’t have much equity built up yet, then we may be able to take over your mortgage payments for what you owe on the home without you having to come out of pocket to sell. On the other hand if you own the house free and clear we can structure a seller financing deal that works for both parties. If you’re somewhere in between we may be able to take over the mortgage and pay you your equity over time or after a few years. When we take over a mortgage we refer to it as buying or selling the property “subject to” the existing mortgage. Any payments or equity left over to be paid directly to you the seller after closing is referred to as “seller financing”.
What Are The Risks of Selling Subject To?
The main risk of selling subject to is the “Due on Sale Clause”. This is a part of every mortgage agreement from a bank that states when a house is sold the bank has the ability to call the full amount of the loan due. This is extremely rare and could happen when the bank either doesn’t receive mortgage payments or if property insurance is cancelled and not replaced. The process is slow and doesn’t happen overnight. If it does happen we simply work with the bank and find a way to either restructure the debt or title in a way that makes sense for the bank.
Another possible risk is in the event that we can no longer make payments on the mortgage. This could potentially be a best case scenario for a seller. In that event, we would deed the house back to you, the seller, and you get to keep all of the payments we made toward the house as well as any updates and repairs. We do everything we can to make sure that does not happen.
What Are The Benefits of Selling Subject To?
There are many benefits of selling a property subject to the existing loan. First and most importantly, you’ll likely make more money selling this way than any other way you could sell. The reason for that is we don’t have to get a loan to buy it. If you have a loan interest rate then your loan payments are probably lower than any loan we could get today, and we get to skip all of the lending and origination fees paid to the banks and put more money in your pocket. We don’t use real estate agents, so you won’t have to pay us any commissions or fees when you sell to us.
We work with your timeline. Need a week after closing to move out? No problem. Need a few months to find a new place and just want to know your place is sold when you find one? No problem. Unlike traditional real estate sales, you don’t have to worry about closing on a specific date or time. Close when you want to!
Worried about getting your property ready to list? When you sell to us you don’t have to make any repairs or even clean when you move out, we’ll take of all that.
"The process was painless. We had to wait a little bit to sell because of the holidays and the KeySolvers folks just waited and when we said we're ready, they were ready too and it was just perfect. With KeySolvers there was no pressure. We had other offers, but they were always lowball offers."
– Tim S.