2 days Ago By Adrian Volenik
Selling a home is usually straightforward – you list it, find a buyer and they get a loan from the bank. But what if a buyer's religion says they can't pay interest? One seller faced that when a buyer liked their house but couldn't get a regular loan. The seller turned to the internet for advice and the story gained attention when shared on the r/RealEstate subreddit .
The homeowner, eager to sell their property, was informed by a buyer's agent that the buyer liked the home but couldn't use traditional financing due to their religion's stance on interest payments, known as “riba” in Islamic teachings . Instead, the buyer suggested owner financing, in which they would pay the seller directly each month after making a sizable down payment. Don't Miss: Maker of the $60,000 foldable home has 3 factory buildings, 600+ houses built, and big plans to solve housing — you can become an investor for $0.
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The seller admitted they weren't familiar with this practice and turned to the internet for advice. They wanted to understand the approach’s pros and cons before deciding. Instead of traditional interest-based loans, Islamic financing offers alternatives like profit-sharing models or arrangements where the bank partially owns the property and the buyer pays "rent" until full ownership is achieved.
These methods are designed to follow religious beliefs while still enabling people to buy homes. In this case, if the buyer stops making payments, the seller might have to deal with a messy and expensive legal process. Additionally, owner financing means the seller stays tied to the buyer for years, which can be risky.
See Also: During market downturns, investors are learning that unlike equities, these high-yield real estate notes that pay 7.5% – 9% are protected by resilient assets, buffering against losses. Suggestions From the Community The general consensus was that financing is the buyer's responsibility.
Many commenters encouraged the seller to politely decline the proposal and redirect the buyer to institutions equipped to handle such situations. One of the top-voted comments said, “I'm not a bank. That's a hard no for me.
They are more than welcome to pay cash if they don't want to pay interest on a loan.” On the other hand, many financial institutions offer Sharia-compliant loans that align with Islamic principles while adhering to modern lending practices. As one commenter pointed out, “There are banks that offer Riba loans.
They should connect with their church or mosque, depending on their religion and ask the leaders there about it.” These options often involve higher up front fees or adjusted terms but function similarly to traditional loans in practice. Sellers were advised to avoid complex arrangements like owner financing unless they were prepared for potential financial and legal complications, with some adding that “someone who is sincerely part of the religious community absolutely knows how this works.
And it’s not what they suggested.” Trending: Unlock the hidden potential of commercial real estate — This platform allows individuals to invest in commercial real estate offering a 12% target yield with a bonus 1% return boost today! The Seller's Decision After reading all the advice, the seller decided not to go with the buyer's plan. They were glad to learn more about Islamic financing but realized it wasn't the right fit for them.
Instead, they chose to wait for another buyer who could get a traditional loan. What Other Sellers Can Learn If you're selling your home and facing a similar situation, it's okay to ask questions and learn more. However, you don't have to accept a deal that doesn't work for you.
Always put your financial safety first and talk to a professional if you're unsure. Be patient – another buyer will likely come along with a more straightforward plan. Selling a home is already a big transaction.
While it's admirable to consider a buyer's circumstances, ensuring the deal works for you is equally important. This seller's experience shows that sometimes, saying "no" is the best decision. Read Next: This Jeff Bezos-backed startup will allow you to become a landlord in just 10 minutes, with minimum investments as low as $100 for properties like the Byer House from Stranger Things.
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