This question comes up a lot for me from some my clients. And the question is yes and no. You have to be creative to buy a house with little to no money down. Institutional lenders as far as I know and at the date that I’ve printed this have stopped offering 100% financing for properties.
In the past you were able to walk in to a bank and even get 105% financing. Meaning you can get a mortgage for the full price of the property, plus 5% cash back to help you out with the closing costs.
Many of my members had taken advantage of this program which allowed them to get into the real estate game. Things have changed.
You can pretty much get into a real estate deal if you and the seller agree to the terms. You just need to be creative and persistent some times. Some brief examples could be:
– Find a seller that may be desperate. You could take over their payments or ask them to do a Vendor take back (VTB). Remember you may need to get an approval for the mortgage transfer. check with a broker.
– Use a promissory note in lieu of your down payment to the seller.
– Ask the seller to do a lease option. This works better in a buyer’s market where the listing volumes is higher than normal.
– You could try a purchase option where you ask the seller to sell them the home to you for payment in the future.
– An agreement for sale or the right to purchase.
– Trade something as part of your down payment if it’s valuable enough.
– The list could go on and on..
The above are some examples and are really limited to your imagination. If the seller and buyer agree on the terms and conditions then that’s all that really matters. Remember to make it a win win situation for all parties involved and check with a legal advisor prior to entering into any agreements.
You should always look for a property that has the potential for profit. Don’t just pick up a piece of property because you want to get in the real estate game. Do your due diligence and find a network you can bounce and share ideas with.