A Look into Australia’s Seller Financing
Have you ever heard of seller financing? If you haven’t, then you better keep reading to find out what seller financing is.
Often referred by solicitors as vendor finance, parents recognize it as seller finance. It has been around in Australia since the late 1800s and has continually become Australia’s trend all these years. Seller finance occurs when a seller moves his property’s financing structure to a potential buyer.
The market is as huge as the “titanic” and it’s continuously growing. In fact, many areas and companies in Australia have taken advantage of seller financing because it is a very good option.
• Meriton, one of Australia’s largest apartment developers, has embarked on vendor financing ever since it started. Until now, they have been a huge success as they continue building their luxury apartments.
• Based on the records of the Land Titles Office in Sydney, there were four areas sold through vendor financing. Among these areas were North Sydney, Chatswood in Sydney, Newcastle and Blue Mountains.
Indeed, more and more people are jumping on this bandwagon of vendor financing. Even developers admit that they a redoing project homes through vendor financing. Today, most of the houses that have been bought with low deposits are also done through vendor financing.
Usually, people strive to save a deposit which they will be laying down as they buy a property. Plus, they also have to borrow money from the bank. Yet, people doing this only comprise 70% of the market. The downside is that banks ask for deposits while the First Home Owner is no longer functional.
So, this is where seller financing comes in. Instead of just catering to the 70% of the population, seller financing opens up a wider opportunity for potential buyers from 70 % to 100% of the market.
There are lots of folks out there who have good jobs but do not have sufficient saving history which makes them eligible for a bank loan. But they do have cash flow to sustain the mortgage payments and a willingness to own a property. Since traditional ways of property selling can not be of help to these folks, seller financing is readily available to cater to their needs. Thus, traditional methods are only opening up opportunities for 70% of the market whereas seller financing paves the way for 100% of the market.
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