Seller Financing, The BIG Question

[James Clark]

I have been looking at FSBO and I have been talking to some of them asking questions like how long has it been on the market, why are you selling, why are you selling it yourself and the norm questions. I want to ask if they are willing to finance, what are the typical deals when a home owner finance the property.

[Christopher Telles]

Originally posted by @James Clark:

I have been looking at FSBO and I have been talking to some of them asking questions like how long has it been on the market, why are you selling, why are you selling it yourself and the norm questions. I want to ask if they are willing to finance, what are the typical deals when a home owner finance the property.

 That's a great first step. Now to complete the qualifying process simply ask them "are you willing to assist a buyer in financing the purchase of the property?". You're likely to get one of two responses; No (which is really not a no until they've rejected an actual offer (and for me they need to reject it at least three times) or what do you mean (or what do you have in mind). 

If the answer is the latter then you should already be prepared with a potential structure based on the quick analysis you may have already completed prior to making your call.

I just made that exact same yesterday. The seller asked what I meant so I told him financing 30% of the purchase price (I already knew I'd need at least a 25% carry back to buy it quick using hard money). I did say in what position the carry back would be in. His next question was "so you would pay 70% at the closing?". My answer was "yes, I could pay you 70% at the closing with the amount you finance if it is subordinate to my new loan". Him "I could do that".