Is there closing cost involved when doing owner financing?
Depends on what you consider closing costs. There obviously wont be any bank fees but the buyer would be wise to pay a title company to do a title search. That fee would be considered a closing cost.
@Jacob Sampson thanks
@Robert Collins I agree with @Jacob Sampson - there are closing costs at the title company that someone will have to pay for - attorney fees, doc fees, title policy, etc. They should be 3-5% of the purchase price.
The great thing about owner financing is you and the seller/buyer can determine who pays for all those expenses.
We have used that strategy many times and love it!
Best of luck!
@Robert Collins Seller financing can be pretty broad. If you're purchasing a property using a Lease Purchase/Option Agreement, you won't have any closing costs until the actual purchase is made and you go through a title company.
The costs coming from a title company will be the same no matter how the property is financed I'd imagine.
One other cost could be transfer tax which varies depending on the city in which you are buying. Some states have none. In my area, for example, the city takes 4.278% of the sales price. I think Georgia does something like $1.00 per thousand? This could be split between buyer and seller, or paid by one party or the other.