Tallahassee Real Estate Blog

I received so much feedback on The Creative Cure For Selling Your Home article that I decided to follow it up with a “how and why” to consider a Purchase Money Mortgage when selling your home.

So what is a Purchase Money Mortgage?

Sometimes a buyer wants to buy a home and has good enough credit to purchase the home, but is short some of the cash that the lending institution will require to close the loan. In cases like this, the Seller can hold a note for some of the cash and secure it as a secondary lien on the home. When this is done, we refer to the Seller’s second a Purchase Money Mortgage. Let’s consider an example on how this could work.

Mr. and Mrs. Smith would like to buy a Tallahassee home. They find that Mr. and Mrs. Jones have the perfect home for sale in Tallahassee and it is priced at $250,000. The Smith’s go to the bank and discover that the bank will lend them $200,000 to purchase the home, all the Smiths need to do is invest $50,000 ($250,000 price - $200,000 loan = $50,000 down payment).

The Smiths look at all of their sources of money and discover that they can only raise $35,000, leaving them $15,000 short. So, working with an excellent and creative Realtor in Tallahassee, they make the following offer:

At closing, the Smiths get $235,000 as well as a note from the Joneses for $15,000.
This creative solution is simple and creates a large market for the Smith Home. Rather than have to lower their price to attract more buyers, the Smiths have attracted more buyers by making the house more affordable (not only to people with large cash reserves).

In today’s market, Tallahassee homeowners need to consider all the creative solutions possible to sell a Tallahassee home.

As a reminder for those who subscribe to the Tallahassee Real Estate Blog by email, some embedded pictures and videos might not be appearing in your email and you might need to click the title header to go to your browser where all will be visible.

Keep checking out the Tallahassee Real Estate Blog every day for updates that include charts, graphs, and analysis of the Tallahassee real estate market.

If you like this Article then please subscribe to my blog through a full RSS feed. You will be able to stay informed about the happenings in the Tallahassee Real Estate Market. You can also subscribe to this blog and have it delivered by Email.

Joe Manausa is a real estate investor and the Broker and Co-Owner of Century 21 First Realty. He can be reached via e-mail through the Tallahassee Real Estate Website or catch his latest writings on the Tallahassee Florida Real Estate Blog , or by calling (850) 386-2001.