What's the best way to convey "I'm looking for long term seller financing"?

Question

since most mom and pop sellers get confused by "seller financing", how should I phrase it?

"I'm looking for sellers who want to receive their equity in monthly payments"?

"I'm looking for sellers who want to receive their equity over time"?

Other?

Thanks!

Joe Doxsey · Answer

Ask them what they are hoping to achieve with a sale and why they want to sell.  What do they owe?  Do they need immediate cash?  If so how much?  Make it about them and listen.

Joe Doxsey · Answer

NP.  Something else people always screw up on seller financing is going too long on term.  If the deal is right you should have a plausible exit strategy to refi in 5 years or so.

Ask question and listen to them.  Then explain how you can help them.  Then propose how you will do so and let them know how quick they can finalize the entire transaction.

IE.  wow that must really be hard to drive an hour every time you have to come to this property.  I'd be tired of that and want to sell it to.  Congrats on the retirement.  I hope I can help you get some cash to take your wife on that trip to celebrate.  I can't pay for the entire property in cash right now and financing is tough as I'm sure you know, but I can do $x right now as a down payment.  That should take care of your trip.  I can then pay you $y a month for the next 5 years then I should be able to finance this out and pay you the $z that would be left.  If you can work with me a bit I think this would be pretty great for both of us.  I can have my attorney draw this up and get it done pretty quick.  How long do you need to talk it over with the wife and make a decision?

Works a hell of a lot better than "Hey have you heard of seller finance?  I'll give you $x now than $y a month later?"

Account Closed · Answer

"What about some now, and some later?"

"What about an initial payment of $10K, and monthly payments of $750.00.  I pay the taxes and insurance.  You get monthly income and no land lording."

Rick H. · Answer

Turn the offer around. It's not about you. It's about them. Don't use Snickers Bars to catch fish. That's what I use to catch lazy copywriters.

Try something about getting monthly payments that are rock-solid secured. (On phone explain that's by their former house).

Remember WIIFM (what's in it for me; every prospects favorite station).

Jim Tiernan · Answer

thanks Rick H.

This is when I'm in conversation with the seller.

Account Closed · Answer

Is it accurate to even suggest that an installment sale will likely "reduce your taxes"?  Doesn't an installment sale just spread out the any taxes due over time?

I would never promote any perceived tax benefit to a seller, ever.  I always say that the sale of the property could generate a capital gain or loss that might need be reported on their tax return.  And for people who aren't familiar with the sale of property, I explain that escrow reports the sale to the IRS and the state, so it's important to get professional tax advice.

Jerry W. · Answer

@Jim Tiernan, I have only used owner financing a few times.  here is my sales pitch.

So do you have something in mind you are going to buy with the money from this sale?   Interest rates are so low now, even CD's are earning less than 1%.  Wouldn't it be great to be able to get 4% on your money?  That's about what the bank will charge me for a mortgage.  You know you could earn that higher rate of interest instead of the bank.  I could do the paperwork so you hold the mortgage not them.  I could do a balloon payout so in say 5 years you get all of your money, or if you want you can extend it if we both agree.  If I don't make the payments you get the house back and the down payment.  It is also likely to reduce the taxes you will pay on the sale by a lot.(Only do this if it is not their homestead)

I have a different one if I am asking them to take a second for the 20% down payment.

Brian Nalley · Answer

I am interested in this for a house for myself (short selling my current place, so need something creative to get into something else). Thanks for the great tips.

So, if they say yes (keep in mind I am a complete newbie here), what is next? How do you get it written up and everything so they know its not a scam, and that you are for real, etc etc?

Thanks!

Rick H. · Answer

Brian - that's an entirely new topic. I suggest that you start a new thread and post something to the effect of, 'How do you script or direct conversations from lead callers'?

You'll get much better response from BP crowd if they see the topic and you'll have better info to craft your call script or lead (input) sheet.

Brian Sealey · Answer

Good advice from everyone. Does anyone have a model or system that they use on calls? Sorta like playing pool, if the goal is to get the eight ball in the corner pocket (a deal) I'm sure you have to have a method. Thanks

What's the best way to convey "I'm looking for long term seller financing"?

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