Case Study: Smart Creative Finance Facilitates a Triple Win in Real Estate
Seller: Michael and Jenny
Michael (56) and Jenny (48) decided to retire in Mexico, planning to sell their $400,000 house in Houston, Texas. To sustain their retired life, they needed a constant income of $2,000 per month.
Buyer: Jason
Jason, a 20-year-old high-ticket affiliate marketer, experienced an unstable income—earning $20K in good months and $2K in bad months. Securing a conventional housing loan was challenging due to his inconsistent income and the substantial down payment required.
Realtor: Sean
Sean, the realtor, had marketed Michael and Jenny’s house for several months with minimal interest and no offers.
The Solution: Seller Financing
Through the innovative approach of seller financing, Sean managed to close the deal at $420,000—$20K above the asking price. The terms included a $40K down payment and a monthly payment of $2,000 for 16 years.
Why It’s a Triple Win Situation:
Seller Benefits:
Higher Sale Price: Michael and Jenny sold their house for $420,000, which is $20,000 more than their initial asking price.
Steady Income Stream: They secured a consistent monthly income of $2,000, perfectly aligning with their financial needs for retirement in Mexico.
Tax Advantages: By receiving payments over time instead of a lump sum, Michael and Jenny could benefit from significant tax savings, reducing their overall tax liability.
Buyer Benefits:
Affordable Down Payment: Jason only needed to make a $40,000 down payment, making the home purchase more accessible without needing a large upfront sum.
Avoiding Bank Loan Hassles: Jason bypassed the need for a traditional bank loan, avoiding the extensive application process and associated costs.
Cost Savings: Without the need for a conventional loan, Jason saved on loan application fees and potential interest rate premiums due to his variable income.
Realtor Benefits:
Successful Deal Closure: Sean successfully closed a deal that had been on the market for months, demonstrating his problem-solving skills and ability to handle challenging listings.
Higher Commission: By selling the house for $420,000, Sean earned an additional 0.5% commission from Smart Creative Finance plus the conventional 6% commission on the entire sale price, which was $20,000 above the original asking price, . This resulted in a significantly higher earnings than anticipated.
Conclusion:
Smart Creative Finance facilitated a successful transaction where all parties achieved their goals and benefitted significantly:
Michael and Jenny secured a higher-than-expected sale price and a steady retirement income.
Jason acquired his desired home without the burdens of conventional financing.
Sean closed a challenging deal and earned a higher commission, enhancing his reputation and financial success.
This case study exemplifies how Smart Creative Finance’s innovative solutions create win-win-win outcomes in real estate, making dreams a reality for sellers, buyers, and realtors alike.