Wednesday, December 2, 2009
Another reason to search for a property based on your available cash...
There are times when your agent might be aware of certain sellers who are willing to offer partial owner financing if they have to. So if you told your agent your price range is $700,000 - your agent should discuss with you what this means. In reality, this means you'd have to put down a minimum of 20-25% for a commercial loan. You might be thinking that you can put 10% down as you might on a residential loan. So your available cash might really be $70,000 but your agent thinks you will have at least $140,000. Big difference. So it's imperative to be honest with your agent and start with the cash you have on hand (or after your house sells) to put down on a property.
But don't get discouraged, yet. If your agent knows that there's a property on the market for $700,000 and the owner is willing to take back a second mortgage to bring you up to the required downpayment, you might have just found your property. Had you limited your search to the set dollar amount, you may not have been able to buy what you wanted. I've seen this time and time again. Using this method will best help you in the end.