Paying Realtor Fees-Seller Finance

[AK Fowler]

I’m working a quadplex deal and planing to make an offer but I’ve never done owner/sell finance. There are real estate agents involved and was wondering if I can add realtor fees in a owner finance deal?

Example: purchase price $285,000

I will pay 10% to owner $28,500

I’ll also pay 6% 17,100

So my out of pocket would be $45,600

Owner will pay closing cost.

Hope that helps.

Thank you

[Bob E.]

@AK Fowler  funny you mention this is just got a verbal agreement today with a seller to buy two properties with owner financing.  You can structure your deal any way you want that works for both of you.  You can do a Balloon payment or agree to pay certain expenses.  That may very well make your offer stand out.  With the houses I am buying the seller is a local couple that is retiring from the business.  I believe they had some other properties they sold this year so I offered to close in January so the cash portion of the sale will not push them into a higher tax bracket for 2021.  I also offer balloon payments a few years out but one in December and the next in January of the following year, again to spread out their income.

Make your deal work for the seller, if it does not work for them then it will not work for you.

Benefits to your offer for the seller are 1) They are getting a higher net price because they save on commissions.  2)  They should be able to (have them ask their accountant) spread their gains over the live of the loan.  This is especially helpful if they have owned for a long time and taken a lot of depreciation 3)  Continue to get monthly income without having to manage the property.

With the seller financing deals we have done as buyers I have been offering to pay the monthly cost to have the loan professionally serviced ($18.50 a month).  They get a 1099 at the end of the year stating how much interest they earned on the loan and there are enough arguments about what was paid when.  A servicer will also make sure taxes are paid and insurance in in place, protecting your seller.