The key to this process is the relationship the buyer forms with the seller.
First, search for a property that meets the following criteria, it has a list price, the square footage, number of bedrooms, number of baths, kitchen layout, parking etc that meets your needs not your wants.
Second, engage the help of a real estate agent. Sign a buyers’ agreement to demonstrate your seriousness of purpose. Do not be intimidated by this contract. They are easy to get out of and you can stipulate that the sellers pay your agent’s commission. Remember a good agent is integral to finding you a property and a seller that fits your unique criteria.
Third, do not be concerned about your credit score. The ultimate factor in determining your purchasing worthiness, whether or not you can pay. Credit score is often used to look at pass experience in order to determine future ability to pay. There are no guarantees. Character and good judgment is just as good a determinant of a person’s willingness and ability to pay. Remember, the option of the property as collateral for the debt does not change.
Fourth, the key is to choose a property where the existing equity plays down the risk, and or the exposure of both buyer and seller. What does this mean? The easiest example is to find a mortgage free property. Don’t be concerned, in this current market there are thousands of properties that meet this criteria where the seller would be happy to make a deal with you.
Fifth, agent should be given their marching orders to find you such a property or something if not at $00.00 debt very close. Keep in mind your object is to talk with sellers who own $00.00 debt on the property. It is up to your agent to find these sellers. They are better equipped than you to do this, if they do not have the experience than move on to one that does.
Sixth, figure out how much rent you pay now and how much more you would be willing to pay in order to partner with a seller and own an interest in the property. You will be entering into what is known as an “Agreement of Sale”. Under such a contract the seller still holds the deed to the property, pays the taxes and insurance for a time certain. You may be required to have insurance in the form of a renter’s policy to protect your furnishings. In any event this is attractive to the seller because there insurance cost under this approach is less.
Seventh, once it is determined what you are will to pay additional for a monthly payment. Approach the seller with your offer and a dollar amount as a deposit and or down payment. All negotiations such as purchase price, down payment, length/time of the contract and monthly payment are in play.
Eighth and this is most important. You will not be able to put a price on teaming up with someone whose work ethic is one of being debt free. They will inherently push you and the deal to in that direction. Try to frame and match the length of the agreement to your ability to pay off the debt at the end of the contract. These agreements generally do not go for more than five years. Keep in mind to pick your property with this eighth point at the core. Do not overextend yourself. Remember the goal is to own the property clear while at the same time building a strong relationship with a person who has already proven they know how to be debt free.
