Refinancing a seller financed deal

[Brandon Callahan]

Suppose you get a seller to agree to seller financing, and part of the reason the seller agrees is because the seller wants the tax advantages of not getting all the sale proceeds all at once.

Now suppose you want to refinance with a bank at a later time. Is this refinance going to mess up the seller’s plan of getting paid out over time? Additionally, is it common for all seller financed deals to allow for refinancing?

Seems like bad form if you spent time pitching a seller on the benefits of seller financing only to refinance the deal and the bank pays off the balance of the note all at once.

[Jerry Padilla]

@Brandon Callahan

The terms are always up to a seller....

But yes, when you refinance the seller would get the entire chunk of money. Usually, they aren’t looking to finance for 30 years, but expect to have you refinance in a year to five years, at least from my understanding. This isn’t my specialty though, so maybe someone that does seller financing will chime in.