Seller Financing Examples

[Steve Sorensen]

I have a seller financing opportunity that I'd like to pursue. I'm looking for some examples of terms that have worked for people:

• Any down payment?
• Interest rate on the loan?
• Term (years) of the loan?
• Any other terms I'm not thinking of?
• Any other advice from those of you that have successfully completed a seller financed deal?

Looking for real numbers from an actual deal if you're willing to share them. Thanks in advance!

[Russell W.]

I put in an offer on a property yesterday. I offered the seller a lower price for a traditional bank financed sale, as well as a full asking price, seller financed option with details below. Important to note the seller does not have an existing mortgage on the property. I haven’t heard back yet, but for the sake of giving you a real life example:

• Purchase Price: $1,175,000
• Cash down payment to sellers: $176,250
• Owner financed amount: $998,750
• Interest rate: 6%
• Monthly interest-only payment to sellers: $4,994
• Annual interest amount: $59,928
• 7 year term, with buyer option to refinance out
• 7 year interest total: $419,496
• Gross purchase plus interest: $1,594,496

All of these terms are negotiable. You might offer a higher purchase price for a lower interest rate, or vice-versa. In my opinion it’s important to have skin in the game with a cash down payment, but that’s one area too that could be negotiable. Hope this helps, I’ll follow up if it materializes further