We do this by providing a specially designed and targeted form of AFS agreement that is available to brokers, buyers, sellers and their lawyers for verification. All parties are strongly encouraged to seek independent legal advice and your lawyer should check the AFS carefully, whether you are the seller or the buyer. With the AFS form in hand and completely understood, you, seller or buyer, will have the knowledge and credibility to present the concept to others. Depending on whether you are a buyer or seller, you can also negotiate certain aspects of the agreement in different ways, so you have to take that into account when you intend to use a model. Credit repurchase mortgages offer benefits to both the seller and the buyer of the transaction. The seller is able to sell his property, while the buyer may be able to acquire real estate beyond the financing limits previously set by the banks. The seller lends Jane $40,000 for the mortgage and agrees to pay $40,000. This individual property now has two separate loans. One of them is the fixed-rate mortgage with the financial institution for $320,000.
The second is the mortgage lender for $80,000. Third, a seller in financial difficulty may be able to achieve a better result than if he can sell the property in the usual way. He or she may have had difficulties in managing the property with regard to rentals, repairs, etc. Cash flow may have become a problem and the seller may have difficulty meeting his financial obligations. In addition, a seller may have little or no equity in the property. Maybe he bought it at the height of the boom. Prices have fallen. The high-proportion mortgage now has a capital balance greater than the fair value of the home. The seller`s equity may be less than zero.
Often, a salesperson may find herself in a situation where she is unable to invest the time and resources to get the investment back on track. In such a situation, a seller will have the minimum ability to do what is necessary to sell the property in a normal manner at a fair price. The leverage of an SFA can allow the seller to sell the property at a higher price. Although the profit, if it exists, is deferred until the final transfer of the property, it may be very wise to enter into some kind of alternative agreement that (i) passes the ownership burden on someone else and (ii) may eventually eliminate losses that would otherwise be incurred.