Lots of good insight here. I'll try not to be too repetitive.
1) Is it possible that the seller would accept a lower interest rate than the market rate? If so, why would they do this?
In today's market it will help the home sell for more and faster. I just did one were the seller was paid out ALL is equity about 165k, we left the underlining in place at 3.124% on a 5 year fixed. After year 5 we turn the rate up .5% each year for the life of the note. The seller did this because he needed to sell fast and wanted top dollar. We did just that.
2) Would the seller also accept a lower down payment than 20%? If so, why would they do this, since this increases their risk right?
Again in today's market homes are setting longer. Sometimes a seller can't be patient and needs to unload. I'm currently Under contract on a deal like this details below...
Days on market are about 188.
We are offering 5k under asking.
5% down. with another 5% down in 12 months 5% fixed with a 5 year balloon.
Seller is paying 6% commission. The seller will make roughly $1500 per month on the carry plus have her big payout in 5 years. We are easing her immediate pain, and still giving her what she needs long term.
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3) Why would a seller ever agree to this? It seems like a bigger headache to manage a loan? What are some of the dire situations they would agree to doing this?
Here in Utah there are two companies to handle this. Escrow Services and Elite, I would not do a deal without using a service like this.
4) Would the seller provide me monthly mortgage statements? If I wanted to pay down the principle quickly, is this possible?
The provider that handles the payments will provide statements also. As far as paying down faster, so long as there isn't a prepayment penalty clause in the note.
5) Would I put the seller down as the mortgagee on my homeowners insurance? Would they also collect escrow for taxes and insurance?
We typically will have the seller keep their home owners insurance in place but change it to a landlord policy. Then have the buyer get a renters policy. The company handling the payments will handle those disbursements as well.
