Questions on Seller Financing

[Robert Ferrell]

Hello everyone, this is my first post on BP and I'm hoping someone out there would be so kind as to asnwer a few questions I have. Before I ask the questions, I'd like to point out that I am a complete newbie to the world of real estate and my only education thus far has been reading the Beginners Guide here on BP. That being said, I am eager to learn and hope to engage in my first deal soon. Now, to the questions:

1.) When aquiring a property by way of seller financing, would it be smart to negotiate a no penalty for early payment clause into the agreement? If this is something that is commonly done, please forgive me, but I ask because, if I'm not mistaken, on traditional bank mortgages there does tend to be a penalty for early payment. Personally, I like the freedom to pay off a debt as soon as possible. So just wondering if that practice would be a no go or something that shouldn't be a problem.

2.) In the same senario, a seller finance deal, should/can I have someone (I'm not sure who actually does this, please let me know) come and inspect the property before I agree to purchase?

I feel like I had another question to ask but it's evading me at the moment. Maybe as the discussion continues I will remember. Thanks in advance to anyone that would like to chime in. And also, feel free to add any helpful information that may relate to seller financing or the above senario.

[Donald Cooley]

Hi Robert, Welcome to BP. 

I purchased a home via seller financing, we did ours on a 3 year balloon. That being said, I don't think a pre payment penalty should be a worry. That being said it never hurts to discuss it and/or negotiate it.

As with purchasing any home you should always make the offer subject to a home inspection. 

Hopen this helps

Don