When I used to think about owner financing, I thought, “Why would you offer it? You’re going to get lower, non-qualified buyers with bad credit!” But Frank Aazami from Sotheby’s Realty opened my eyes to a completely different reason to offer owner financing.
You see, internationally, there are a lot of tax burdens and pushback on high net-worth individuals. By offering owner financing, you’ll get qualified buyers with tons of money tied up in their markets or various assets. They’re well qualified, but there are too many tax ramifications to incentivize them to purchase multimillion-dollar properties.
According to the Profile of International Transactions in U.S. Residential Real Estate report from 2019, the No. 1 foreign buyer last year was China—they purchased $13.4 billions worth of real estate in the United States. In descending order after China, the next biggest international buyers were Canada, India, the United Kingdom, and Mexico.
In China, there’s a lot of downward pressure, and the number of international transactions has actually gone down year over year.
On the twelfth episode of our podcast “Luxury Listing Specialist,” Frank Aazami discussed the concept of owner financing, and I highly recommend that you check it out.
In the end, thinking outside the box and being creative is necessary for selling high-end and luxury properties. Most luxury markets are in what’s called a buyer’s market, and they’re full of stale listings that aren’t getting any showings or are receiving negative feedback.
Owner financing is just one of the ways you can think creatively. Sure, you may get your share of tire-kickers and unqualified buyers, so you’ll have to do your due diligence. Just remember that it only takes one qualified buyer from China or somewhere else in the world. Talk to your broker-owner, attorney, and/or title company before making any decisions, but it is our job as marketing agents to present available options and let clients choose what’s best for them.
As a final note, check out www.LuxurySpecialistGear.com to see our new swag! We have some cool hats in white, gold, pink, and navy blue, as well as some awesome shirts.
If you have any questions, please feel free to reach out to me. And remember: Continue to raise the bar. Work smarter, not harder. Prove others wrong.
I hope to hear from you soon!