And FHA buyer are driving prices up to the point that not only there is no cash flow but you are going to be in negative.

And by balance I mean being realistic & compliant.It's good that you have some idea of the terms you want, but know that because of CFPB guidelines, your borrower has to show they are capable of making whatever payment/terms you set.There's lots of factors to consider when financing, so I am only going to touch on one to give you some food for thought.When I see high rates on seller financing it is usually for 1 of 2 reasons:The seller wants a higher monthly P&IThe seller plans to offload the loan to an institutional investor later and doesn't want a huge discountTo #1 I say, reduce the term/amortization of the loan.

When I factor in insurance and property tax my monthly expenses add up to $950.

Cracks depend on a hundred different factors such as humidity on the day of the pour, ambient temperature currently, ambient temperature on pour day, etc. 

Maybe he wants to just try and make sure his bid comes in below the amount of that check, but probably not, and again, it costs what it costs, so the payout shouldn't factor in for him.

Do I drive a new fancy car?

I'd bump that up to 10%  or 12% to be conservative.You'll also have to factor in utilities, since there is no way to know who is using what.Let me know if you have other questions. 

Louis looking for some advice...I was driving for dollars and came across a FSBO sign.

If you factor in principal payments in the equation, I'd be looking at $338/mo as of right now.On the flip side, I'm pretty sure on a conservative estimate, we could sell our home at 175k, possibly as much 185k.

If not, you'll have to do some driving around.