interest rate vs. sells price on owner finance homes

5 Replies

I was wondering if it wiser to lower the sell price and raise the interest or raise the sell price and lower the interest when selling to buyers with owner finance. If the price or interest is adjusted a little the monthly payment could be the same. Are buyers more interested in interest rate or price? Of course there is the group of buyers that only want to know, "How much down and how much a month".   

You should keep in mind that they could refinance into a regular loan at any time, thus creating a bad situation if you have adjusted the price too low.

If the sell price was slightly higher with the interest rate slightly lower would that affect the taxes that the buyer had to pay?  

Account Closed   Are you providing seller financing, or are you simplying inquiring for information that you can provide pros/cons to your buyer?

The answer to your question really depends on what your buyer wants, as you already stated that some would want a lower price and higher intrest, and some would prefer slightly higher price but lower interest.   It would depend on their preference and how they are working out their unique situation, so every situatino would be different.... but lets be honest here, we know most people are attracted to lower price right NOW, and worry about the future later.

Thats my two cents.

People that buy using owner financing usually do so because they can not get other financing. All they are interested in is how much down and how much a month, until tax time, then interest payments become important.
Sellers provide owner financing usually because no lending institution is willing to finance there trash. Unless your a flipper why would you want it, but then I digress. Another reason a seller is willing to finance is income, and let's face it, too many times the seller will get the property back.