Seller Financing for Flip

[Jon Higgs]

I'm unusual on this forum -- a homeowner looking to sell to a flipper. Sometimes, after parents die, you just need to get out from under an old house that needs lots of work. Can someone with experience at this please help guide me with perspective and warnings (about 'gotchas' !) about this !?

The numbers below are very rough ballpark ...

The offers I got are low, except one guy, who will pay a *lot* more IF I finance the sale. In PA, my understanding is that if he buys from me for $250k cash, and plans to fix up over 6 months, then re-sell ...

1)  2% transfer tax is immediately due on $250k 

2)  he has high costs for a $250k+ loan for 6 months.

BUT -- if he buys from me [down payment of $25k], and we agree that I finance a $225k loan for 6 months at some modest rate, then he saves a lot of money and grief on getting short-term financing, PLUS he saves the $5k transfer tax upfront.

From my perspective, I don't immediately need the cash, and I'd rather have $265k in six months than $250k tomorrow. From his perspective he saves a lot of time and money -- which also allows him to possibly invest in more properties (assuming he has multiple work crews -- which he does).

What are the problems or dangers in this that I'm not seeing ?

THANK for your insights and guidance.