Learning how to sell a financed property is one of the most interesting ways to get good deals in real estate.
Although an already financed property has some more complex issues to watch out for, it can be a very interesting alternative for your future clients.
However, in addition to respecting real estate ethics issues, you must also respect the Legal and Legal process that involves negotiating an already financed property.
But do not worry. In today’s article, Ville Imob will help you to understand this matter in a practical and fast way.
After all, learning how to sell a mortgaged property doesn’t have to be a mess, as long as you follow all the steps correctly. Grab your coffee, a pencil and paper to jot down the tips and keep reading.
How to sell a property financed safely and correctly?
Even though most brokers and real estate agents are used to selling paid-off properties, selling them still in the financing phase can also be an interesting possibility.
However, to do this, you will need to understand some things that are related to the Legal process for that sale. After all, it is assumed that a good can only be sold as long as it is in the seller’s name.
But a financed property is not in the seller’s name. But yes, it is in the name of the financial institution.
Yes, the bank keeps the property in your name until the financing is 100% paid. This is a way to guarantee in case of default by the payer.
Therefore, if the seller wants to sell his financed property, he will need to do this through the intermediation of the financial institution. After all, she is the owner of the property.
While it’s bureaucratic, it’s not complicated. All we need to do is pay attention to each of the possible situations, look for the necessary documents and proceed.
Here are three situations that can be found when selling a financed property:
- Sell financed property with cash payment;
- Sell financed property when the buyer also wants to finance;
- Sell property financed with the defaulting owner;
Let’s understand in detail each of the above situations. Keep reading.
Sell financed property with cash payment
Perhaps the simplest way to learn how to sell financed property is through cash payment to the new buyer.
In other words, when the person interested in the property wants to deposit the full amount of the value of the appraised property, he can have the property in his name more quickly.
However, it is not enough to simply hand over the money to the seller. It is necessary to inform the bank that the property will be paid off. After all, the bank owns this property.
And the processes for cash payment and ownership transfer will take place in accordance with the internal policies of each financial institution.
However, as an example, we can mention the discharge by bank slip or bank transfer.
In other words, in this case, the bank makes a payment slip with the full value of the property to be paid off, the new buyer pays and the bank refunds the amounts that the initial buyer had already paid during the financing.
Even though it is a simple mathematical account, you must carefully observe the contract for this maneuver.
When many years have passed since the original financing, interest will need to be recalculated and bank fees may apply. So, for that, go to the financial institution and ask for a simulation before closing the deal, ok?
Sell financed property when the buyer also wants to finance
If your client has the money to pay for the property in cash, the process can be less bureaucratic and a little faster. After all, the settlement of the property will generate a change of ownership and a new contract in the name of the new future owner.
However, it is possible that your client wanted to buy the financed property, through a new loan. Although it is a more complex process, it is also possible and you can count on this strategy to offer properties to your potential clients.
In practice, this type of maneuver causes the new buyer to buy the property from the bank, not the original seller. After all, for the seller to be the owner of the property, he needs to have the property 100% paid off.
Therefore, it is very important to look for the financial institution to make a simulation of a new financing, so that a new real estate appraisal is the basis for the calculation.
Now, the new buyer will owe the bank, and the old buyer will receive the amounts due, according to what has already been paid during the financing installments so far.
It is important to understand that this type of maneuver can involve a number of fees. After all, it will be necessary to formalize new contracts, in addition to having to authenticate documents in specialized registries.
In other words: it is essential to understand that this is a process that can take time. So, check all the necessary documents before even filing the process, ok?
Sell property financed with the defaulting owner
And finally, there is one more possibility that surrounds the process of buying and selling a property that has already been financed: default.
If you are a realtor or even if you want to buy a property that has already been financed, it is essential to check the current payer’s default. After all, if the property is overdue, it can be put up for auction.
Even though it is always possible to negotiate with the bank a new contract and a readjustment of installments after a default, it is essential that this is verified as soon as possible.
After all, the bank has the right to sell the property if the payer does not pay the installments.
Therefore, only advertise on your real estate website or social networks those properties that are ready to be sold.
And speaking of social networks, get to know Ville Imob’s social media integration tool.
You’ll be able to quickly export properties to social networks, expand your reach and improve your sales. You can even export properties directly to WhatsApp, a fundamental tool in the life of brokers today.
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Understand what the debit balance is and how it is discounted monthly
To understand a purchase and sale contract, we often look only at the amounts paid monthly and project them for future years.
But a contract is much more complex than that, as there are several clauses that can be activated or deactivated in certain situations.
However, something that is very important to assess when selling a financed property is the question of the outstanding balance. While the outstanding balance is simple to understand, there are details that need to be interpreted.
For example, if you bought a property for R$300,000 and paid an installment of R$1,000 per month, be aware that, in this amount, there is also interest and corrections.
So, in practice, you will be deducting less than R$1,000 per month from your outstanding balance.
Therefore, in order to have the exact calculation of how much you still have to pay off your outstanding balance, you will need to take your contract fees and check how much interest and correction you will be paying. What’s left is the property’s value.
What happens if I buy a financed property that goes to auction?
This is a practice that needs extra attention.
After all, it can be quite dangerous to sell or negotiate a property that is up for auction. Therefore, keep in mind that you will need, first of all, to contact the bank to verify the possibility of a purchase or sale of a property that has already been financed.
For example, if the current payer is late one installment (or a minimum number of installments the bank imposes), this property can go up for auction at any time.
So it can be downright frustrating for both the broker who was about to sell and the buyer who was about to buy.
Never make verbal or undocumented agreements that may indicate the viability of the business, ok?
This is one of the most valuable tips for both those who want to buy and those who want to sell a property that has already been financed.
Can you use two different banks to sell a financed property?
Yes, it is possible. Although there is a bureaucratic process behind it, it is possible to sell a financed property to a new buyer who also wants to finance.
But for that, it will be necessary to follow all the common rite that this process asks for, with the addition that the current bank will have to connect with the new bank and, thus, make the creditor institution transfer.
As this is a maneuver aimed at migrating the business to another banking institution, it is very important to check the rates. Look carefully at the contract for anyone who has no final surprises.
And preferably, look for a lawyer who understands the matter to verify the possible undue charges that, in high and financed amounts, may go unnoticed.
Financing a property that has already been financed can take time, especially since the new buyer will first need to have the amount approved in their name.
So, keep everything organized so that nothing gets lost during the process. And if you’re a real estate agent, using a management system to organize this, like Ville Imob’s, is a good idea.
Our management system for real estate agents keeps everything in the Cloud, you will be able to integrate all the processes and you can make a better financial management. And if you work in a team, you can also evaluate everyone’s performance.
Click here and learn about Ville Imob’s real estate management system.
How to calculate the value of a financed property to sell it
This calculation can be done in several ways.
In general, the property will need to undergo a new real estate appraisal so that, in this way, its value is updated and is compatible with the market value. After all, real estate can appreciate or devalue over the years.
In addition to the value of the property, the debit balance in the contract must be considered, so that the bank can reimburse the current payer, according to the amounts due.
Tips for Realtors to Negotiate Real Estate Already Financed
There is nothing more frustrating than being sure that a property will be sold and, when the time comes, you realize that for bureaucratic reasons, the property cannot be sold.
There are several ways to guard against this. But there is a class of properties that need even more special attention, which are financed properties.
Therefore, we have set aside some practical tips that will help you to work more adequately when selling properties that have already been financed. See below:
- Always observe the current owner’s default;
- Check all property documents before offering it to a new customer;
- Keep in regular contact with the seller so that he remains in good standing;
We’ll talk in detail about each situation above from now on. Keep reading.
Always observe the current owner’s default
As much as a financed property can, yes, be sold, know that it needs to be fully regularized. In other words, a financed property is neither an irregular property nor a delinquent property.
However, for this to really happen, the debt needs to be paid regularly and every month.
Therefore, it is very important that you, the broker, observe the current payer’s default. If there are problems with this, do not offer the property to new customers.
Check all property documents before offering it to a new customer
Property documentation must also be up to date. Make a careful and technically biased check to understand if the property is, in fact, ready to be sold.
Even if you notice a good opportunity in the market, it is very important that you pay attention to real estate ethics, so that you can offer a 100% regularized property to new customers.
Keep in regular contact with the seller so that he remains in good standing
A very important tip for you to make good deals with properties that have already been financed is: keep in close contact with the current payer. After all, you need to make sure it stays in good standing until the property is actually sold.
Otherwise, the business may not move and bring a lot of headaches for both you and the potential new buyer.
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