How Does Owner Financing Really Work?

Owner financing, occurs when the seller of a home finances all or a portion the sale of his or her own property. This is often referred to in real estate ads as "Owner Will Carry" or similar wording, meaning that the owner of the property will, in effect, act as a bank and loan the purchaser all or part of the money needed to purchase the owner's property.

There can be several advantages to the seller for carrying a note, as it is also known. There can be tax advantages in spreading out the time over which an owner receives the money from the sale of a property. Also, many owners simply like the idea that they can receive a monthly income from a property even after they have sold it - and no longer have to worry about repairing leaky roofs or replacing dead water heaters.

There is a nice monetary inducement to the owner to carry paper as well - the owner can charge the buyer interest on the money that the owner is lending to the buyer. In this way not only does the owner collect a monthly mortgage payment on the property he or she has sold, but the owner collects interest as well, in effect increasing the owner's overall sales price of the property.

How Does Owner Financing Really Work?

In order to protect themselves, some homeowners require that the buyer make their monthly payments into an escrow account held by a bank or other lending institution, and they require the borrower to place a Quit Claim Deed into the escrow account with instructions that if a payment is late by a certain number of days then the escrow officer will automatically file the Quit Claim Deed, restoring the house to the former owner instantly.

If this were to happen the buyer would not only lose title to the property but would also lose any and all payments already made on the property. This is a powerful incentive for the buyer to make all payments in a timely manner.

A more pragmatic reason, perhaps, why some homeowners agree to carry a note is to increase the universe of potential purchasers for their property. The way this works is easy to understand. If the homeowner is making a portion of the loan on the property then the borrower will need to qualify for a smaller loan from a bank or other financial institution, meaning that a larger number of people will be able to qualify for any bank loan that might be required to purchase the property. If the seller finances the entire selling price of the property then buyers do not need to qualify for a bank or other financial institution loan at all. This can greatly increase the number of people who are interested in buying a piece of property.

For starters if the owner is financing all of a sale then a borrower does not have to qualify for a loan at a traditional financial institution. Even if the seller only finances a portion of the loan the borrower benefits by having to qualify for a smaller loan from a traditional mortgage source.

Additionally, when a seller finances a property there are no points or closing costs for the buyer to pay, saving the buyer potentially several thousand dollars on the transaction. And while the seller of the property may charge the same interest rate that a bank or other financial institution would charge, it is sometimes possible for a buyer to actually end up paying a slightly lower interest rate if the seller finances the sale since more aspects of the sale are open to negotiation than may be possible when dealing with a traditional lender.

Many factors can influence whether the seller of a property is willing to carry all or a portion of the sales price on a piece of property. In many cases, however, the determining factor is the overall condition of the market itself.

When homes become difficult to sell - when it is a buyer's market, in other words - then sellers are more inclined to do whatever is necessary to increase their chances of a sales and so owner financing is more readily available.

Conversely, when homes are selling quickly and it is a seller's market, then sellers have little incentive to carry back a mortgage.

So your chances of finding an owner willing to carry back a mortgage are largely dependent on the current housing market. But regardless of prevailing market conditions, it never hurts to ask if an owner is willing to carry paper.

How Does Owner Financing Really Work?
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Critical Negotiation Skills For Dealing With Complex Negotiations

Do you find yourself in a position where it is difficult for you to make sense of all the issues & interests of the many parties that are involved in a negotiation?

This is a common challenge. Much has been written about how to deal with complex negotiation situations - unfortunately most of it is generically focused and does not address the needs of business negotiators.

The field of business-to-business negotiation can be very complex indeed, and without a navigational tool to assist you in managing this complexity, you could miss opportunities and cost yourself and your organisation dearly.

Critical Negotiation Skills For Dealing With Complex Negotiations

The key to unlocking optimal value from your complex negotiation situations is for you to identify and understand the interests of all the parties impacted by or participating in the negotiation. In some cases, it can be easy for you to understand both the positions & interests of stakeholders in the negotiation. In most cases, however, it is not only difficult for you to identify the interests of stakeholders; it is also difficult for you to identify all the stakeholders.

What then are the most critical strategies and skills you need to successfully deal with complex, multi-party negotiations?

1. Identify all the stakeholders in the negotiation.

This may be stating the obvious but in practice, it can be difficult for you to spot and track all the stakeholders in a negotiation. In a business environment, you should at minimum try to identify the following stakeholders:

a. The financial stakeholders

These are the individuals or groups that will finance, underwrite or lend authorisation to conclude an agreement based on the financial terms proposed. It is key that you identify all potential individuals that may have an interest in the financial aspects of the negotiation.

b. The user/consumer stakeholders

These are the individuals or groups that will implement and support the outcome of the agreement that is reached. Typically these are the stakeholders that will live and work with the outcome of the negotiations on a day to day basis.

c. The technical & legal stakeholders

These are the individuals or groups that will sign off and approve the technical and contractual dimensions of the negotiations.

d. Guides/Gurus & other Influences

These are the individuals or groups that hold significant influence over the decision makers involved in the negotiation.

2. Identify the interests of each stakeholder in the negotiation

There are basically two ways for you to identify an individual or group's interest in a negotiation. The first way is to put yourself in that individual or group's position and to try and see things from his/her/their perspective. What supporting data would you require? What precedents would apply? What assumptions can you make, and test?

The second way is to ask the individual or group a series of questions to help you (and them) to accurately identify their key interests. The best question to ask is "Why?" "Why is this negotiation important to you? Why are you assuming this position? Why is this option being explored?"

3. Create a frame that is appropriate for each stakeholder.

Once you have identified the interests of each stakeholder, you should now create the appropriate frame. Different people take decisions for different reasons. It is not appropriate to highlight the same points to support decision making to all stakeholders. You should focus on communicating the most appropriate frame to each stakeholder or potential stakeholder.

A decision, or part of a decision, can be significantly impacted by the frame that you create for the stakeholder.

4. Create an effective management structure for the negotiation

It is of critical importance to think about how you will manage the various stakeholders in the negotiation. In complex transactions, you will need various resources to support the negotiations. It is critical that you identify a clear role for each participant and that you create an environment within which you present your counterparts with a consistent message.

If your counterparties experiences you and your team to be rational, the odds are greatly enhanced that they will also respond to you in a rational fashion.

You can only present a unified and rational 'front' if you have considered the roles & responsibilities within your negotiation team.

Split the focus in the team between those that will manage the relationship aspects, and those that will manage or be involved in the task related activities. Remember to create an agenda that addresses the interests of all potential stakeholders.

A successful way for you to simplify complex negotiations is to add structure.

You need to focus on the process elements to ensure that you make progress at every level of the negotiation. You will find that complexity can be more easily managed with the use of an appropriate supporting structure.

Critical Negotiation Skills For Dealing With Complex Negotiations
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Jan Potgieter is the Founder & Managing Director of Business Negotiation Solutions Limited. To sign up for a free 5 day negotiation skills training e-course go to http://www.negotiationeurope.com

Customer Service Cover Letter Sample

The customer service cover letter sample below shows the principles of good cover letter writing. It is longer than the conservative standard. The sender begins by saying which job she is applying for. She also pays a few compliments to the company. In the second and third she highlights her skills and accomplishments. The last paragraph of the customer service over letter sample sets the stage for an interview.

Customer Service Cover Letter Sample

Dear Mr. Smith,

Customer Service Cover Letter Sample

May this letter find you well. I read in your web site that you are in need of a customer service representative. I have been in this field for six years and presently am employed with ____ in its sales department. Having heard of your recent acquisition of ____, I see that yours is a fast-growing company with a bright future; I would be happy to render my skills at your service.

My warm, friendly and charming personality helped win the loyalty of our clients. I am proud to say that since I started working for my current employer, the number of returning customers has doubled!

Besides customer care, I also worked as public relations officer for the Office of the Mayor. Attending to people and listening to their concerns so that we may work out a solution is natural to me. My experiences have taught me that for any business or organization to thrive, it must always maintain an open and active line of communication with its patrons. It is the task of customer service representatives like me to secure this for you.

For your reference, I have attached my resume which details my work history, training and seminars, and awards. But I think I would be able to tell you more about my qualifications in an interview. Please do not hesitate to call me so that we may schedule a meeting.

Thank you for your consideration.

Yours sincerely,

Jane Henry

Customer Service Cover Letter Sample
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Mark Mattey is a writer and entrepreneur. To learn more about Samples of Cover Letters or Cover Letter Sample, visit his website.

Bachelor Degree - BA Vs. BS

There are a lot of people who wonder why some bachelor degrees, when you get them, designate you as a bachelor of arts and other bachelor degrees designate you as a bachelor of science. Well, the answer is very simple.

A Bachelor of Arts degree goes to somebody who gets a bachelor degree in any non-technical, or science related field. A Bachelor of Science degree goes to somebody who does get a degree in a science related field. The designations are set up by the colleges themselves.

So, what's the difference? Does it really matter?

Bachelor Degree - BA Vs. BS

The answer to that question may shock you. It matters very much.

The reasons will not be immediately apparent to the student, but when he or she goes into the real world to get a job, they are going to be in for a rude awakening if they're looking for a specific type of job and don't have a bachelor of science degree.

If you're scratching your head wondering why this even matters, the answer is as follows. Most Bachelor of Science programs are a little more intense than a Bachelor of Arts program. In other words, in addition to the degree having to be in a science related field, the degree itself will contain more required courses than a Bachelor of Arts degree. Of course this varies from college to college, but within each school the bachelor of science program is always more intense than the bachelor of arts program. There may be one more required course per semester, or more science courses required. The bottom line translation is, the program is harder to get through; in some cases, a lot harder.

So why does this matter? Well, there are certain jobs, such as in the fields of engineering, chemistry and physics, just to name a few, where if you look in the classified ads in your local paper, it will clearly say, "bachelor of science degree required". So if you graduated college with a bachelor of arts degree, you won't be able to apply for that job. Oh, you can still send in your resumé, but don't expect to be called in for an interview.

Now, here is where this becomes very important. There are some colleges that will allow you to get a Bachelor of Arts degree in math, which is technically one of the sciences. The program doesn't have as many requirements. So when you graduate, while you technically have a degree in one of the sciences, because of the fact that you don't have a bachelor of science degree, you will not be eligible for that particular job that says "bachelor of science degree required".

It may seem like a nit picky thing, but these companies want to know that you can get through the tougher curriculum. They want to know that you have a good chance of being able to handle the job that you're applying for. Is there a really big difference between a bachelor of arts and bachelor of science degree? In an undergraduate program, probably not too much. But in the minds of the companies, where there is so much competition for jobs, it is a big deal.

Bachelor Degree - BA Vs. BS
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Michael Russell Your Independent Bachelor Degree guide.