Who says banks should say who gets to buy a home? Right now, banks are turning away good borrowers, choking home sales. What's the answer? Seller financing. There's just one little problem. Real estate agents need to tell sellers that it's an option.

And according to Greensboro, North Carolina, agent Jennifer Nelson, some agents out there are losing deals because they're still relying on banks.

"Like most folks, I’m fed up with giving the banking industry all the power," Nelson says. "I feel everything is negotiable between buyers and sellers." 

Nelson lost two deals because banks are going out of their way to kill deals.

The first was for an investor putting $50,000 down on a $72,000 investment property. Denied by three lenders for not showing enough financial information. When the angry seller called Nelson to vent, Nelson offered to hammer out a deal using seller financing, an idea that was never mentioned to the seller as an option by his own agent.

The second deal was for a AAA credit client who wanted to buy a second property. Deal was killed after weeks of delays by lender after using HOA financials as an excuse. Nelson went to the listing agent and offered seller financing as an option.

Nelson has an advantage that other agents don't have - she was in the banking industry for years before becoming a Realtor, so she knows how to structure a loan.

But that shouldn't discourage any agent from trying.

All it takes is a willing seller and buyer and a good real estate attorney to structure the terms and do the contract.

Here are a few things to consider:

1. Immediate cash upfront from buyer to seller (negotiate 3%, 10%, 20%, 30%, 50% ... )

2. Negotiate terms that will benefit both seller and buyer goals

3. Tiered interest rate options

4. Negotiate monthly, quarterly, yearly payments

5. Negotiate interim (additional) payments to seller quarterly, if long term

6. Obtain buyer asset(s) to sweeten the deal

7. Explain seller default options

"Buyers get to eliminate the huge closing costs associated with working with a lender and all the multiple, questionable, and unexplained fees," says Nelson.

Seller financing isn't risk free, but there are options even in default situations, like the seller takes back the house.

That's a deal you can take to the bank.

Published: June 17, 2008

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Blanche Evans is the award-winning senior editor of Realty Times, the Internet's leading independent real estate news service. She is featured daily on the Realty Times Video Network in the "Realty Viewpoint" segment. Blanche has been named one of the "25 Most Influential People In Real Estate" by REALTOR Magazine, and has been twice recognized as a "notable." In 2005, she was named "Top Reporter Covering the NAR" by Delahaye-Bacon's. Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. To contact Blanche, email her at . For more articles by Blanche, click here.