Ideal Seller Finance Terms (For Buyer/Investor)

[Barrington Webb]

Hello Family!

I'm considering using seller finance to acquire my first property. Do you have any advice on how I should negotiate the contract? Also, what dangers should I look out for?

[Chris Seveney]

Quote from @Barrington Webb:

Hello Family!

I'm considering using seller finance to acquire my first property. Do you have any advice on how I should negotiate the contract? Also, what dangers should I look out for?

Are you buying it as an investor or owner occupied? That will play a major role in things.
You will still want to use a title company, if its owner occupied use standard fannie mae forms for note and mortgage.
You will want to know the amount, rate, term and if there is or is not a balloon. Also make sure its fixed with no prepayment penalty.

If its an investor loan, make sure to check if there is a confession of judgment and personal guarantee required. As an investor you would not want these but most lenders absolutely require them, but if the seller is a first time seller finance they will most likely not even know what those are.

Also do not do a contract for deed or lease option