The engine of the real estate market is new home buyers. It is this which drives new homes, the sale of existing ones and enables the entire chain of supply and demand to move on as existing property owners upgrade their homes and move to new ones.

New home buyers however rely on credit and the global credit crunch was threatening to slow down their lifeline and turn a vibrant real estate scene into a stagnant pond with no new home buyers entering the scene and little real movement in real estate.

Thankfully none of this is now going to happen. The US Federal Reserve has made $20 billion available through auction to a large number of commercial banks. In London the Bank of England is about to put in another $20 billion plus in a money market rescue plan aimed at easing the global credit crunch we are experiencing.

As well as the Bank of England and Fed, the European Central Bank and the national banks of Canada and Switzerland are also involved in the plan. What this means for the foreclosure market is two possible things and we will examine each in turn:

First, we will see an easing of credit restrictions and a relaxation of lenders’ fears about defaulting home owners which means that the crackdown we have seen on those who are late in paying their mortgage and the excessive number of foreclosures that are being triggered as a result will start to ease off. This will also ease the pressure on the real estate market which is in danger of becoming imbalanced by the excessive number of foreclosures happening at the moment. This is good news because it means foreclosures that do happen will act as the balancing mechanism for our economy that they are meant to be.

The second thing that will happen with the easing of the global credit crunch is that borrowers will, again, have easier access to credit which is one of the main things driving the housing market.

The net result of this that the real estate market is going to start picking up steam again, house prices which have either dropped or are in stagnation will again register a move and foreclosures, which have been vehicles of opportunity and a means to release pent up cash, will, once again, begin to offer that promise.

I grant that at the moment we are not seeing a lot of hope in that direction but it is early days yet. Money markets have a tremendous amount of inertia and it takes time to see the positive effects take hold. They will though and we will see the results we expect before too long.

One known method to maximize your profits when selling your home is to offer finance to buyers yourself. This form of financing offered by sellers, better known as seller financing, is a mutually beneficial financial option to both the parties. For sellers, it provides a regular source of monthly income and lower taxes, while buyers benefit from this form of financing if they are not eligible for other forms of conventional loan options.Seller financing can be an excellent method to sell a house without seriously reducing your expected sale price. We are aware that many people are unable to get traditional financing and resourceful property sellers and their real estate agents can minimize their efforts in getting a property sold. Further, sellers who offer financing can usually demand a higher price for their property, even in recessionary markets.

Most home sellers never think of the option of financing the buyer directly simply because they are not aware of the benefits nor understand how creating a note works. There are several advantages selling house with owner finance. Seller finance is convenient and offers the much-needed flexibility in terms of time and repayment plans. You, as a seller, also act as the moneylender and the buyer will pay in the form of monthly payments that include interest. When you fail to get the payments regularly, you have the right to get your property back in foreclosure.

Seller financing is a powerful way of selling a house when the market is slow or when there is stiff competition with many similar houses for sale in the market. Just listing the house as OWC (Owner Will Carry) will make the house temptingly stand out and attract more buyers. Because many individuals are finding it difficult to obtain funding from a bank, offering financing will open the doors to these prospective customers as well. This will significantly increase the pool of potential buyers.

Seller financing has yet another key benefit- the possibility of selling for a higher price than the originally envisaged price. Offering to carry back a note will not only greatly increase the number of potential buyers, but also bring a unique list of buyers who are ready to pay a higher price than the general population.

When the house seller finances the prospective buyer, they can also act as the lender. That means they could structure the deal to collect interest. Over time, if the seller holds on to their note, this can add up thousands of dollars as additional revenue. In short, there are multiple advantages to sell your real estate with seller financing – quicker sale, higher price, lower loan costs for the buyer etc.

Please remember that before you offer owner financing, you need to own the property without any encumbrances and clear of mortgages. If you do not own the property free and clear you can use a form of seller financing known as a lease option. This enables you to get someone into the house quickly but you still hold title. Avoid people buying your property subject to the existing mortgage. This may be risky because they are not guaranteeing that they will make the payments and if they default, you will be in dire straits.

Make sure that you run a quick credit check on all your prospective buyers and also obtain information about their repayment capabilities. You might demand ten percent of the total costs as down payment before offering seller finance. You can then opt for collecting monthly payments directly or hire a professional servicing agency to maintain all transaction records.

There are currently $8.5 trillion in outstanding debt a quarter of which is owed by adjustable rate mortgages (ARMs). Adjustable rate mortgages are at the heart of a huge national debate revolving around predatory lending practices and they are exactly what the problem is.

In a nutshell there are a lot of people with ARMs who had not had the mortgage terms explained to them adequately and, as a result, find themselves suddenly unable to keep up with repayments and unable to keep the house which they had bought which are then put up for foreclosure. In my view these are just the wrong type of properties to foreclose on and I will explain why.

Foreclosures are an integral balancing mechanism of our financial system and, as a regrettable but necessary percentage, are always there. The more house sales and growth the system experiences the more foreclosures you will get. As a percentage these are steady, even if in terms of numbers they go up, because that’s how balance is maintained in the system.

Adjustable rate mortgages completely change the picture. Because many were sold in ways that did not make it clear to home owners what the payments would go up to they have become a ticking timebomb about to explode in the face of people who are not adequately prepared to deal with it and who should not have been sold these mortgages in the first place.

This amounts to mis-selling and as such needs to be addressed in ways beyond those currently available, which means that legislature is required, because it otherwise leads to foreclosures at a rate that generates an imbalance in our economic system and short-circuits the ability of the foreclosure mechanism to create stability in our economy.

As a real estate foreclosure expert I know for a fact that anything which pushes foreclosures into a zone that significantly increases the percentage they reflect of the house buying market is a bad thing. It leads to a depression of the market, dropping prices, tighter credit, less available money and this also leads to fewer house sales, fewer new houses being built, fewer jobs in the economy and generally a bad time for all concerned.

All this has come about because, unfortunately, there are unscrupulous lenders who are interested more in how many mortgages they sell than who they sell them to and how they do it. Such short-term profiteering is damaging to the economy and hurts the reputation of real estate investors as well as foreclosure experts and mortgage lenders. Legislation has the power to force mortgage lenders to be a lot more transparent in the way they lend money to prospective house owners and that cannot come a moment too soon.