Uninformed sellers!

[Matthew Murphy]

Scenario: Duplex each side is 2bd, 1 bth. Seller is offering to carry contract. Terms, purchase price $85000, Down payment of 20k. 10-15 year contract negotiable. Property needs minor rehab (5k), currently it is vacant. 

1st question:

What is the best approach and plan for engaging with a seller, offering financing, but the home needs work and they are overpriced?

2nd question:

Knowing they are over priced, what is the most strategic way to lower the price and their expected down payment? While not trying to upset them and blow the deal.

I have not contacted them yet so I am unsure how negotiable they are. Older couple (tired landlords) selling other properties as well.

Just trying to develop a game plan and approach for when I make contact with them. Thanks guys!

[Michael Boyer]

Agree with above, don't offend seller (seller financing is more and more rare in many areas).. and part of the seller's analysis is whether they trust the buyer to make payments for the next decade and a half.  So if they don't like the cut of your job, it could be over before it starts... Think lots of win/win....

After building the rapport, I think I would wait to look at the amortization tables together.. having sold 2 places with owner financing (one total, one partial), the actual sale price is just one factor for the seller. This seller may be willing to come down some if they see what they may make over time on interest.... Indeed, this may be where they make the money...

Another negotiating tool is showing how the property does (or doesn't) pencil out, and express this not as your desire to profit so much as "making sure I can get you (the seller) your check in the mail in every month (or in escrow account).." So they see their interest in it cash flowing well..

The condition is dicey as they may take it personally (even it is true) if you know the condition, but you could find a tactful way, such as most buyers may want the work done at closing (but not you, you'd just make it easy and take it off the price)...

That is about my best top of my head negotiation ideas, then use a title company for standard closing, recording, uniform docs, etc (or lawyer is required in your area and/or used by the title company)..

Best of luck...