Structuring Seller Financing

[Devin Woods]

Hello All,

I have a generic question regarding seller financing and how to actually put the deal together.  I have a property I am looking at and I believe the seller may be open to this, and I feel we would both benefit from this type of deal. I am just unsure of how I actually put together this type of financing. Should my realtor be putting it together, do I need an attorney, a closing company, etc... I am just looking for some guidance on how to physically get the seller financing in place and a legal note created. Any help would be appreciated. 

[Bill Gulley]

Originally posted by @Devin Woods:

Thanks Jeff, that does shed some light. The seller I have actually owns his own property management company for a REIT, and is looking to offload the property as he doesn't have time to grow his business and personally invest. He stated he has his own closing company that he uses for his purchases, and is also a licensed Realtor himself. Should I suggest we contact his closing company for an attorney or should I find one on my own? I also have a Realtor on my behalf who the seller has agreed to pay 3% to. I guess what I'm asking is to take this from a "generic" question and see if you would suggest anything specific for my circumstance? Thanks again for your initial response!

Let's see, you're rather new to this, you have a Realtor, the seller is in the RE business, telling you he doesn't have time for it, translation is that he knows more about it than you do, it could well be an overpriced dog, do your own due diligence, don't rely on a Realtor who gets paid to sell you the place. Get an attorney to draft documents after you negotiate the terms and deal, don't take a balloon requirement you can't pay off, find out exactly what your financing options are before you contract. If you are buying as an investment Dodd-Frank won't apply. If you do seller financing, insist on loan servicing, especially with another RE operator as a seller, it protects bot of you and makes life easier for the seller. Search "Loan servicing" on BP. I've posted extensively about loan terms, sorry, you'll need to dig. Get an attorney and a loan servicer. Due diligence is key to protecting yourself. :)