Seller financing question

[Sharad M.]

Hello all,

I am negotiating a seller financing deal. The owner has no mortgage on the property. This will be my first seller financing deal, so I am a little confused. My questions are:

1) When I write up the agreement, do I include that the payments will be made to an escrow account? My main concern is that I want to have a proof that the payment was made each month.

2) What are some other things I need to be careful about?

Thanks in advance for all the replies.

[Marc Faulkner]

Sharad,

Seller financing can be a real win-win for all parties involved in that there are a lot of points to be negotiated on. You can use some give and take on these to make sure everyone gets what they need out of the transaction.
1. You have the price
2. You have the down payment / Maybe the sellers is in a cash pinch and will give you a better price and or rate if you put more money down? Maybe they will do a 0 down del for you if you agree to their other terms and conditions.
3. You have the term or length of time to pay back the note, and you can also use balloons.
4. You have the interest rate. Some sellers will give you a great rate if you don't beat them up to much on the asking price:)

In buyers markets there are always a lot of seller financed deals out there. The key is making sure that it is still a DEAL and that you are not buying into the project just because the sellers are making the financing easy! As the buyer, in a buyers market (or any market for that matter) you are going to want to negotiate terms that are in your favor while still getting the seller what they need.