What does this mean..

Question

Saw this on a description on a MLS listing that saw interest in.

Seller willing to owner finance with a large down payment. (20%) listing price is 223k.

what does this mean?

Nicole Heasley Beitenman · Answer

It means if you can put 20% down, they'll, indirectly, loan you the rest of the purchase price. Instead of paying the bank each month, you will pay them.

John Morgan · Answer

It means they’re the bank. Good for people having a hard time getting loans. And great for the seller who’s capitalizing off that.

Tim Delaney · Answer

@Jayson Valdez it is best to reach out to them and find out exactly what they had in mind. The other question is - were you planning to put 20% down?

With seller financing you can be as creative as you want. Sometimes it could be a straight 30 mortgage. Others it could be shorter or longer. Or maybe it could be amortized over a longer period of time but have a balloon payment due in 5-10 years. Because of the high rates right now that may not be a terrible idea if they are willing to do a lower than standard rate.

There are multiple podcast episodes that touch on seller financing (I can’t think of any off the top of my head though), I would go listen to those.

Eliott Elias · Answer

It means they want 20% down and to finance the rest to you. Look into interest rate/balloon/amortization.

Danny Polanski · Answer

The only cons I am aware of are you can lose the property the same as conventional means.

You would need to find out the terms of the owners proposal.  If they are old they may want a a shorter loan length, etc. If interest is low it may well work out. You need to ask the sellers tho.

Jayson Valdez · Answer

Are there Cons to this type of deal? Like less years than 30yrs to pay the loan off?

Danny Polanski · Answer

In addition to the above comment, typically owner financing deals offer significantly lower interest rates than lenders do.

My first deal ever was owner financed. I would recommend looking into it more if you like the property.

What does this mean..

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