Are you tight on your budget and feel that time works against you? Do you prefer doing business without as many extra costs and hassle as possible? If your answer is a positive yes, then we have excellent news! We have found an unconventional solution that eliminates unnecessary extra costs and go-between fees. In the meantime, it buys you precious time.

Beginnings are always tricky - How do you go about buying a home?

Suppose you’re fed up with your current rent and want to dip your toes into homeownership. So, you begin entertaining the idea of financing a home in 2023. However, you suddenly realize that you (somehow) amassed a bad credit score that reduces your chances of getting a conventional bank loan to zero. You would be surprised how many Americans walk in your shoes.

But instead of giving in to despair, we suggest you go about alternatives to buying a house with lousy credit. And one of the trendiest ways to purchase a home (but we should warn you upfront that it is not without its own hazards) is seller, creative, or owner financing.

Owner financing 101

The rules of owner financing apply as much to buying or investing in real estate as to any other business. The gist is that you establish a business rapport with the seller instead of applying for a mortgage loan lender. Before we help you locate owner-financed properties in your area, let’s explore their pros and cons!

Which are the outstanding perks of doing business with owner financing?

Taking a first look at how owner financing works helps you realize you can come to flexible terms with the owner instead of dealing with a traditional lending institution. Thus, you can negotiate the interest rate, down payment, and repayment agenda.
Secondly, you can considerably cut your closing expenses since you won’t have to pay the standard fees a bank loan application charges.

Thirdly, since no bank or loan broker evaluates your mortgage eligibility, you can close indefinitely faster (and cheaper.)

Be aware of the dark side of owner financing!

Don’t get carried away by the owner financing’s short-term advantages, though! Essentially, the money you save in the short run, you make up for it in time. Sellers know the risk they expose themselves to when choosing owner financing. For instance, you can default, and they end up with potentially huge property renovation costs.

For this reason, they will (presumably) charge you a higher interest rate than a bank would. Secondly, you must prepare for a so-called balloon payment, the final sum of your loan repayment due in six to ten years (depending on contract terms.) Suppose you can’t finance that lump sum. Then, you risk losing all the money you have invested in the project up to that point.

How to track down owner-financed homes in your neighborhood?

Now that we have established the meaning of owner financing let’s dive deep into creative ways and strategies to find properties closer to you than you’d expect!

Reach out to your friendly local realtor!

Licensed and expert local real estate agents are updated with new properties listed on the market. For this reason, they also have access to owner-financed homes for sale. So, once a seller decides to offer their asset with creative financing, your local realtor will know and pass the information on to the interested buyer or investor.

Besides, they may personally know homeowners willing to do a seller-financed transaction without it ever being listed. But their assistance doesn’t end there! They can negotiate a better interest rate and more advantageous terms in general.

You can visit real estate listing sites that feature seller-financed homes or multiple-listing-service websites. You’ll find this criterion in the property description. However, not all US counties offer access to MLS sites only to real estate agents.

Do your own personal research!

The main point here is to limit your research to paid-off houses. So there should be no mortgages, debts, or liens left behind and weighing down on the property.

Look into inherited properties or find burn-out landlords!

Older homes or inherited properties (whose current owners live elsewhere) stand a better chance of being paid off. Note that newer constructions might be in foreclosure, significantly complicating your situation.

Besides inherited assets, you can find landlords who suffer from the fatigue of leasing their property and finding or dealing with new tenants. We recommend you start your research in US cities where it’s worth being a landlord.

Another extreme instance is trying your luck with landlords who had tenants recently evicted. How to go about finding public eviction records? It would help if you started at your local courthouse or the appropriate court website.

These two cases present mutually beneficial scenarios for both parties involved.

A neglected house’s proprietor can be open to owner financing.

While driving through your neighborhood, you can search for neglected homes and vacant or run-down properties. Why do we recommend dilapidated houses? Because the owner might sell the property as is.

Since they have no interest in moving in or investing a substantial sum in a property face-lift, they may be willing to sell it with owner financing. Also, property tax payments can be a drag for them.

Millennials owning a second home

Being a bachelor sure has countless perks, and your housing needs aren’t that sophisticated. A two-bedroom and one-bathroom condo will suffice. However, once a spouse moves in, and a child is born, your space requirements suddenly become emphatic. You move out and buy a big house with plenty of room.

What happens with the first, smaller home? If you don’t sell it instantaneously, you become a (passive) landowner.

Suppose you don’t want to go through the hassle of renting out your first co-op, townhouse, or condominium. Then, the chances are that you are prone to an owner-financing negotiation with a potential buyer.

Social media can help you find owner-financed real estate.

You can look after the original owner in the county property records. Or you can track it on trending social media platforms, for example, Facebook. We also advise you to join neighborhood communities and real estate groups featuring buyers and sellers.

Someone will eventually recognize the property you are searching for and provide valuable updates. Then, you can contact the owner and see whether they are open to seller financing. This method is free of charge and takes a little energy and time on your behalf.

Rarely, if you’re lucky, you can stumble upon a “For Sale by Owner” sign. Then, you can contact the seller directly and inquire about owner financing.

Here is a valuable tip for you. A buyer’s market facilitates this financing because owners don’t find buyers quickly. For this reason, properties can stand for a more extended period on the market. As time passes, their owners may lose patience and can sign an owner-financed agreement with you.


Undeniably, owner financing can benefit first-time homebuyers and real estate investors. A direct and flexible relationship between the seller and buyer facilitates the negotiation of better terms.

You can find seller-financed properties through a professional agent. Secondly, you can do research online by browsing MLS websites. Thirdly, you can explore the neighborhood you wish to buy real estate personally.

It would be best to focus your attention on ignored, dilapidated, or forlorn properties, the owner of which obviously doesn’t care about keeping the house in good shape. In addition, you might want to find inherited homes, the heirs of which don’t want to hold onto their inheritance. Another route is searching for tired landlords who don’t want to do anything with leasing their property. Happy hunting!

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