Seller Finance Servicing Benifits for Seller

[Ikenna Okoye]

Hi all,

I'm looking at a lead in the Ft. Worth area in Texas for a few seller-finance properties. I've offered the owner his price, a decent interest rate, and a 5+ year ballon on the note. Since I'm newer, I don't have the 20% down that the seller wants for the properties. His main concern with having no "skin in the game" is if I fail to perform and don't pay him for up to 6 months before a hypothetical foreclosure or him taking the property back. 

One option I know of that could help alleviate some of his concerns would be a servicing company that collects payments, but I'm unsure if this is usually used for seller finance transactions at all or if it's only Subject-to deals. My question is, what are some benefits that I can present to him, if any, that can ensure his confidence in me as a buyer as far as making payments? Can servicing companies provide a kind of insurance, can they enforce payments somehow? Any insight would be helpful, thanks!

Ikenna

[Shiela R.]

Hi @Bruce Lynn.  A lot of good info here.  All due diligence still applies.

One way to ease a seller's mind about skin in the game is "deed in lieu".  Since the seller is the lender, sign a document that transfers the title of the property from you to the seller/lender. Then they won't have to foreclose if you stop payment but rather can take back the deed and ownership to the real property.