November 28, 2023

In the dynamic world of real estate, success often hinges on an agent's ability to understand and leverage various financing options. Kyle Whissel, from Whissel Realty Group, sheds light on innovative financing strategies that can be game-changers for real estate agents. This blog post unpacks the key insights from a recent episode of the "Real Estate Success - The Whissel Way Podcast," focusing on how these strategies can help agents secure more listings and offer better value to their clients.

Understanding Seller Financing

One critical aspect that agents often overlook during listing appointments is the seller’s existing financing. According to Kyle, this oversight could be the thin line between winning or losing a listing. He emphasizes the importance of inquiring about the seller’s current loan situation. This information can be a gold mine, opening up opportunities for both the seller and potential buyers.

The Goldmine of Assumable Loans

If a seller has an assumable loan, such as a USDA, FHA, or VA loan, this could be a key selling point. For instance, a seller with an outstanding VA loan amounting to $800,000 at a 3% interest rate, on a property valued at $1 million, presents a unique opportunity. A buyer could assume this loan, paying a significantly lower interest rate compared to current market rates. This option not only makes the property more attractive but could also fetch a higher selling price.

The Edge of Subject-To Financing

For non-assumable loans, Kyle introduces the concept of "subject-to" financing, a strategy where the buyer purchases the property subject to the existing mortgage. In this arrangement, the mortgage remains in the seller's name, but the buyer assumes the payment responsibilities. This method, while slightly riskier, can expedite the selling process and potentially command a higher price. For those interested in exploring this further, Kyle recommends learning from Pace Morby, a renowned expert in subject-to financing.

Seller Financing: A Win-Win Scenario

In cases where the seller has little to no mortgage, seller financing becomes a viable option. This approach involves the seller offering a loan directly to the buyer, which can yield higher returns than traditional savings or investment routes. For sellers, especially older ones, this could mean doubling their returns compared to putting the proceeds in a CD or money market account. Additionally, offering seller financing expands the buyer pool, making the property attractive to those who might not qualify for conventional loans, thus facilitating a quicker and potentially more profitable sale.

The Competitive Advantage

Kyle warns that failing to inquire about and leverage these financing options could be a disservice to the seller. By not exploring these avenues, agents might miss out on opportunities to sell the property faster or at a higher price. In contrast, agents who are well-versed in these strategies can provide superior service, stand out in competitive listing appointments, and ultimately deliver better results for their clients.