Seller Financing Questions

[Tom P.]

Hi. If I offer seller financing, does that exclude having to do an appraisal? If not, can I back out of a seller financing deal if the home doesn't appraise at the price I'm offering? Also, who normally pays the legal/closing costs when doing seller financing--the buyer or seller? 

[Charles Carillo]

@Tom P.

As a buyer who is suggesting seller financing, I would include/cover the legal fees (creating the mortgage, and my legal closing costs) in the offer. The seller would cover their own legal closing costs. Yes, you could add an appraisal clause in the offer but most people I know who have done seller financing deals do not include an appraisal contingency (in most situations, the properties are being purchased under market value). You should however have an inspection and due diligence contingency. 

[Arsen Atanasovski]

You can do an appraisal but you need to state everything you will be doing in the terms of the land contract and cover all those items with the seller and exactly what you want in your offer to the seller as for legal fees and title fees usually in seller financing deals the buyer would pay for that and taxes would be prorated.