Buying a Home on an REC
Real Estate Update with Cheryl Marlow
770 KKOB AM’s Residential Real Estate Specialist!
First thing you need to know is that we call Real Estate Contracts REC’s. You might be wondering what exactly they are? To put it simply, a real estate contract is a way for the seller to act as the bank for the buyer. In other words, the seller is essentially lending all or a portion of the purchase price for their home to the buyer and accepting monthly payments, to include interest over a period of time.
Buyers do not have to qualify for REC’s! However, most sellers will review the buyer’s credit reports. And in most instances it can be much easier than qualifying for a mortgage and many sellers will take a chance on someone with poor credit, especially if they have a good explanation.
You can see why these REC’s are attractive to buyers, because for a buyer with little, bad or no credit it may be the only way they can purchase a home. It might not even be a credit issue. They may be self employed or in a new job. There can be many reasons as to why qualifying at the bank can be difficult or even impossible. Another reason is that the terms and the down payment are negotiable between the buyer and seller. And since you’re buying the house, then you get the tax deduction for home ownership.
I have dealt with a lot of REC’s and when I started selling property 24 years ago they were very popular. And when financing became really easy, they almost went away. But right now, they are back and more popular than ever. But it’s important to remember to work with a professional that is well versed in dealing with these types of transactions. So if you are interested in buying, or selling today please give me a call at 238-3272!
Cheryl Marlow
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