Seller Financing Question

[Kin Hei Lam]

Hi Everyone

I was curious about what are the normal terms of a seller financed deal?

And also how would a buyer approach a seller to get them to finance?

[Brandon McCombs]

With the 9 unit apt bldg I bought last year I found out by doing some research that the sellers would do owner financing. I wasn't looking to do 100% financing though with them. I just needed enough to pay my bank the 20% down payment. So I asked the sellers if they would be willing to do that. They were, but they wanted 1st deed of trust, which wouldn't work for my bank. They eventually settled for 2nd deed of trust and for the loan itself it was for $60k amortized over 10 years with a balloon payment after 5. They weren't interested in the interest. They just wanted to ensure they got their money back because they had been burned in the past so I offered up the balloon payment, which they accepted.

So, in my opinion each seller financing situation is different. Do some research to see if you can find out whether the sellers have done any type of financing before with buyers or just flat out ask them. You have nothing to lose by asking.

I'm looking at a parking lot right now to purchase but need seller financing again to help with the down payment. My wife is my agent so I asked her to ask the selling agent whether the sellers are amenable to owner financing. If they want to do 100% and have better terms than my bank then all the better but otherwise I'd just want enough to pay my primary lender the down payment they require. Mix and match like that if you have to.

Good luck!