Owner WANTS to offer owner-financing, but there's a loan in place...

[Brandon Nelson]

I have clients who own a lot worth $200K, and they have a $120K balance on the mortgage. 

We got an offer from a buyer for $200K, with these terms:

$30K cash down payment

Interest only owner-financing at 5% for a 12 month term or when the building permit is ready to go, whichever is first.

The sellers could free up about $50K in cash from retirement accounts, etc., but with the buyer's $30K down that still leaves about $60K that they'd need to pay off their loan + Realtor fees, etc.

The sellers want to sell to this guy, and they're willing to make something work.

I have not yet been able to look at their existing loan, but I'd make the assumption there's a due on sale clause. It originated with a local lender, not sure it was sold off.

Should we start with the current lender, try to negotiate a transfer of the loan to the buyer?

Or should we be looking at an option, or a right of first refusal, or ???

How would the pros make this work?