The new trend, well not really. Peer-to-peer or seller financed sales have been around longer than the banking industry. To define simply peer-to-peer financing is the buyer and seller agree to the price and terms, and the buyer makes installment payments directly to the seller. This direct system eliminates the bank, but it puts the pressure of accounting and collection on the seller.
Given our economic crisis and the inability of most buyers to qualify for a bank loan, peer-to-peer financing is on the rise. This puts sellers in a difficult position carrying a note worth $100,000.00 at 10% interest for 30 years does not make cash available for emergencies or the little surprises of life. The seller cannot call the buyer 2 years later and change the terms or claim a hardship and demand payment in full. The seller is holding a note of decreasing value and a note he no longer wants to carry.
There is an option, the seller can sell the note.
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