- Published 10-30-14
- by admin
What is a Private Lender?
When trying to sell a home, it’s possible to sell to someone who wants to live there, or also to an investor. Investors buy homes to sell to others, so they often look for great deals where they don’t have to pay a lot of money to get the home. For some sellers, that’s not a problem. They just want to get the home sold for a price they can accept. Another advantage to selling to investors is that an investor will often use a private lender.
Why Investors use Private Lenders
Private lenders typically have the cash and can loan it quickly. That means the investor who is trying to buy the house won’t need to get a bank loan, which can lower the chances of the sale not closing. For someone who wants to sell a house fast, choosing an investor who uses private lenders can be an excellent way of getting a house closed and moving on to whatever comes next. Of course, the price of the house will have to be right for the investor to be interested.
Even if the investor feels the seller’s house is a good deal, it is possible that the private lender will see it as too much of a risk. This can come about if the price of the house is too close to market value, or if there is a lot of work that will have to be done to the house in order to get it ready to sell. Some work is certainly expected, but most of it should fall under the heading of cosmetic upgrades.
Private Lenders Aren’t Banks
They don’t have to follow the same rules that banks are bound by. That can make them a great choice for any investor who wants to buy and sell houses, because getting money through a private lender is often a faster and easier process than applying for a bank loan. The payment structure and interest rate may also be very different, and terms can be negotiated between the parties. If a seller wants to get a house sold quickly, pricing it right and looking for an investor who uses a private lender may be the way to go.