Sophistication is Now the Standard of Owner Financing

Owner financing have come a long way from its original form as to where anyone and everyone with a little cash at hand could have an owner carried note created. There have been many stories in history how these deals where closed not with any sort of documentation but simply by a firm handshake and the borrower promising to make payments according to verbal agreement.

Due to a downturn of today’s market a greater sophistication of the industry has become more standardized, but don’t be discouraged; I can tell you common sense underwriting still drives the transaction. In essence, the owner financing industry has developed to the point whereas now it’s a marketable commodity. Mortgage note buyers now have at their disposal measurable statistics on industry trends, sophisticated financing models, as well as collection and servicing software.

This evolution is great news for individuals holding real estate notes or for those considering selling a property and providing financing, because it allows you to help protect your investment by building in a variety exit strategy whether you sell the loan or collect it to maturity.

Therefore, one of the most important thing to remember for someone thinking about seller financing is that it is in his or her best interest to qualify and gain a comfort level with the buyer prior to the sale by obtaining as mush information about the buyer as possible in order to ascertain their ability to make payments and honor all other covenants of the loan documents now and in the future.

Use Internet to Sell Your Business

For a first time seller, preparing an organization listing for online selling of his business can be a difficult task. Preparing a cover letter and other marketing materials may take a lot of time of the seller. However, while most sellers get busy in getting these details right, they often ignore the importance of having detailed and accurate financial statements. The sellers may fall into the trap of useless complications in the absence of accurate data. Therefore, as a seller it is very important to give yourself adequate time (typically some months) to get your company’s fiscal situation in order. Getting all the documents right, including historical financial documents, tax statements, documents related to any debt or liability, and facts and figure stating future growth prospective will help you keep your shoes clean and build a trust bond with potential purchasers.

Estimating a fair value of his business is another stressful task for the owner. Some sellers keep a low value in the beginning, but start increasing their prices as the responses from buyers start pouring in. Nevertheless, as a new seller you will be happy to know that the online marketplace for business for sale offer certain tools to help you determine a fair and adequate price point that you can offer to your clients. These tools calculate the prices based on certain typical factors, such as business size, geographical location, gross earnings, liquidity, competition, and debt.

Getting the latest data regarding the marketplace and other related fields is also very important before planning to sell your business. Your focus should be to target the potential purchasers with highest and best value propositions. Highlight the best attributes of your business while marketing it. Ensure that you produce as much data as possible without hampering the integrity and confidentiality of your business. If the buyer is demanding for more personal data, ensure that he is a genuine buyer (not a spy) and get a non-disclosure agreement signed by him before disclosing any confidential information. Last and the most important tips for any seller are to be absolutely honest with his customers and to offer a price that is fair and justified.