"Dawna and Rachel were a complete delight to work with. Through their guidance, expertise, and negotiating abilities, I was able to accept an as-is offer, that was over asking price, within one week of going on the market. While the circumstances around the sale were incredibly complex, they managed to overcome every obstacle. It should also be noted that Dawna didn't just quickly list my house for sale to churn out a quick transaction. First, she helped to set up an estate sale and landscaping services. She then set up a home inspection and went on to use that report to receive sub contractor bids for the repairs needing to be made. This helped to create transparency and negotiating power during the transaction, which ultimately led to a quick, as-is sale. Dawna was incredibly communicative, informative, diligent, and thoughtful throughout my first real estate transaction. Her service most certainly exceeded my expectations and I can comfortably say that she will be my local realtor for life. I would highly recommend procuring her services."
- Loan or gift from family or friends- If you are fortunate enough to have loved ones who want to assist you with your purchase, talk to your lender about the best way for you to receive and/or document financial assistance from them. In some cases this will need to be characterized as a gift and/or it will need less documentation. In all cases, your lender needs to be aware of the actual source of funds and will have specific guidelines for you to follow so you get the best loan program for you. Alternative: You could consider joint ownership in a partnership with your family/friends, so they get some benefits of property ownership as well. There are many things to consider with partnerships; refer to tax and legal counsel for more information.
- Proceeds from sale of other property or asset- If you have another property or asset, it may be sellable or financeable so that you can create more cash for your purchase. In all cases, the closing costs for the sale of the property or asset should be considered and deducted from the potential proceeds. Alternative: You can use a tax-deferred exchange from other real estate. This process requires guidance from tax and legal professionals, along with strict time periods and limitations.
- Increased loan amount from your lender- 20% down is not the only way to purchase your property. You might be able to borrow more of the purchase price, through a different loan program with the lender. This could leave more of your current cash assets intact. There are some attractive loan programs for as little as 3-5% down. Some loan programs may allow for no down payment, with restrictions. Loan alternative: Seller financing. See our Davies Top 5 Tips for more info on Seller Financing.
- Seller credit to buyer- The costs for a home purchase are not merely your down payment. We estimate 2% of the price of the property in closing costs, in addition to the down payment. If you expect to get a loan and/or have repairs that you intend to make, there may be an opportunity to negotiate with the seller of the property to give you a credit towards the closing costs. Be aware, your loan provider will have limitations on the maximum amount that you can receive from the seller. Your agent should be aware of this and assist with gathering this information.
- Savings- This is the least creative but most traditional way to purchase real estate.