owner financing

[Tom Vallatini]

Hi

I am looking at a deal listed for sale with a realtor. I wanted to ask if the owner would look at doing owner finance. What is the best way to approach the realtor? New to this site

thanks

Tom

[Account Closed]

I've purchased two properties with owner financing.  The first was a 2 acre unimproved lot in WA state.  It sat for sale for over a year, with nobody biting.  The reason was mainly because the locals couldn't stand the seller (small mountain town area).  I said it doesn't matter if he's a jerk, if you have a contract.  So, once I had enough for a downpayment, I made an offer for seller financing, and offered a couple points over current interest rates.

He countered for a bigger downpayment, and I said I can't do that because I need that money to put in the driveway.  He accepted, mainly I think because he hoped to get me to put in a driveway and then default.

Then, I started cutting down trees to sell so I could put in a well, and he showed up and stopped the loggers (local guys afraid of this sue-happy jerk).  I explained that our contract had no timber clause (which I made sure of, but didn't mention as this guy buys property and cuts down the trees - but he left a line of them along the 600 foot highway on this lot), and that I was going to use the money to put in a well, which would be worth more to him if I default.  He backed off, and I got the well in.

I sent all of my payments to him via certified letter which required a signature, which I'm sure he just loved having to do every month.  But, I had to cover my rear to make sure he couldn't try to foreclose on me.

Anyway, that was the first deal.

Second deal was in 1995, when the market had crashed in CA, and there was a condo for sale, which was hard to sell because of condo financing.  I offered a low down, again, but a high interest rate and they countered by agreeing to those terms, but with a balloon payoff in 10 years.  I sold it just a couple years later for a profit.  This one was in Davis, CA.

So, it depends on the market and on your seller.  Sometimes, they'd rather have the slow steady income with an attractive interest rate, rather than a lump sum they may have to pay taxes on, etc.