Seller Financing

[Matthew Nieroda]

My realtor came across a home where his client is looking to either rent a unit or sell the 2 family outright (property not yet listed). Sounds like the seller (50's aged women) may be in financial struggle but the home most likely has no mortgage since it has been passed down from her parents who have passed. 

The seller is potentially looking for $470k for a home that is worth $440k. My offer would be to owner finance with a $400K deal, $20k downpayment and finance $380k at 2% interest. Since it is a multifamily she would continue to live in one unit, where she would pay market value for the unit. 

I believe if pitched properly the owner financing would benefit both parties, especially her since she would not have to pay taxes on a lump sum and she would be able to continue living in her home she feels comfortable in. The deal works for me since I would be paying a lower interest rate then a bank, and work for her since she would collect more money over time then what she's asking.

Two questions. 

1. Who pitches the owner financing, I believe I can help the seller understand the situation and the details better then the agent, and is it stepping over boundaries by going around the agent to speak directly to the seller?

2. Is my 2% offer for owner financing fair? Is it to low? What kind of ballon payment deadline (6-10-15 years) is standard for such deals?

This would be my first owner financing deal, I currently have a condo that I would be moving out of and renting to move into one unit of this multi-family.

Any other information or help is greatly appreciated.

-Matt