seller financing

4 Replies

How does seller financing work when realtors are involved? How do they get paid?

That's the challenge in structuring owner financing on listed property. The structured deal typically needs to include enough cash to pay the realtors commission, in addition to any cash needed by the seller.

I've never done it nor do I know anyone that has but you could ask the realtor to take s/he's commission over time. If they want security give them a note. If they want secured security then record a note secured by the property.

Alternatively, raise the commission from other capital sources to get the realtor paid.

Just because you are selling owner finance doesn't mean $ doesn't change hands.  Usually you'd get a down payment that would go to the seller from the buyer.  It could come out of that.  I guess if you don't take a downpaymet you'd have to write a check.

There are also could be expenses around a licensed loan originator and set up fees for a loan servicing company if you go that route.

Typically the seller pays the realtor. So if you are talking about acquiring the property then that's between the seller and his realtor. 

I've ran into this a few times one time when I was the seller. It was a house we built on the beach just before the bottom fell out in 2006. We had it listed and the realtor brought us a  couple that needed financing for a little while until they could get some things taken care of. We did it on a Lease with Option to purchase and the agent knew that she wouldn't get paid until the deed transferred (hopefully in 3 years). We have one more year to go until they must pay or walk.

Originally posted by @Shawn Thom :

Just because you are selling owner finance doesn't mean $ doesn't change hands.  Usually you'd get a down payment that would go to the seller from the buyer.  It could come out of that.  I guess if you don't take a downpaymet you'd have to write a check.

There are also could be expenses around a licensed loan originator and set up fees for a loan servicing company if you go that route.

 Best answer! 

10% down is common, but not sufficient really when Realtors take 6% and closing cost can take 2% and as mentioned, loan costs. It takes a motivated seller to walk away from that closing! :)

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