Ins and Outs of Seller financing

[Samantha Chacon-Johnson]

Hello, 

I am interested in learning about seller financing. I am curious what I need to make my first deal. Do I need a broker to do the paper work? Do I need a real estate agent to negotiate terms? Do I need a lawyer to look over the contract? 

What can the terms be? What is a reasonable interest rate? Should I have an exit strategy? Are there tax advantages? What are the pros/cons? 

Samantha 

[Matthew Bernal]

Samantha, seller financing is essentially the seller acting as the bank — you make payments directly to them instead of a traditional lender, with terms negotiated between buyer and seller.

You typically need a real estate attorney to draft the promissory note and deed of trust which is non-negotiable. An agent or broker is optional depending on how the deal is found. Terms are flexible rate, amortization, balloon payment, and down payment are all negotiable. Rates often run 6-10% depending on market conditions and the seller's motivation.

Are you looking at seller financing for a rental property or a fix and flip situation?