Paula Gold-Nocella is a realtor, broker, and developer with more than 20 years of experience in real estate. Her latest venture, Global/Quarters is a fractional real estate brokerage with listings for shared ownership properties around the globe. As fractional ownership expands and new projects break ground around the world, Halogen Guides spoke to her about the role that real estate agents have in advising clients through the sales process.

What should real estate agents looking to get into fractional sales know about mortgages? What are the financing options for prospective buyers?

Gold-Nocella: Financing options are available, although many buyers do pay cash. Fractional financing is a niche market and not every traditional lending institution is on board to make loans. That said there are several players in the industry. They range from the very large developer lenders to the small local lenders. Each has their own criteria for underwriting and often you will find that lenders in this field prefer to work with developers or sellers with successful track records in proven destination locations.

What are the costs of such loans?

Gold-Nocella: The costs for fractional financing can vary quite a bit from lender to lender, which is not unlike traditional real estate financing. What is important to know is that the buyer will be required to have a minimum of 25 percent and as high as a 50 percent down payment on any financing. They will likely pay an interest rate premium of a point or more over the prevailing rate on a primary residence. This too is not unusual; as you move away from the primary home purchase into commercial or second home financing, it is very common to pay more for a loan.

Interested in learning more about buying a fractional residence? Download our Decision Guide to Fractional Residences.