Rental Property Investor · Whitefish, MT · Member since 2016 · 60 posts · 11 votes
I found a 6 plex for sale. In order to come up with a big enough down payment for the bank-I asked my realtor to ask the seller's realtor if they would consider owner financing part of the down payment. (about $100k). We would refinance within a few years.
About 10 days ago I asked our realtor to ask the seller's realtor if they would consider owner financing $100k of the price. TODAY I get a text from her saying the seller's agent won't ask the seller until we have approval from the bank that they will accept that! Am I totally off base to be upset about this? Isn't it the agent's job to present these type of questions to the seller?
I have talked to the bank about this before-but not this particular property.
I'm not a lawyer, but my general understanding is that in many/most/all states a listing agent is required to present all writtenoffers to her or his client, the seller.
It's a waste of time to negotiate back and forth over something that the relevant commercial lender might not even be willing to go for.
I'm not in the commercial lending world, but in the residential lending world I have seen inexperienced agents allow their clients to negotiate all sorts of crazy things that we simply will not allow.
@Maria Vogel this seems like something that would be put in the offer to purchase. I also agree with @Chris Mason
Most commercial brokers want to bring a buyer that they know will perform, and if the buyer is already asking for cash from the seller, the perception is that you probably can't close the deal.
A good option might be to get your financing in order before you look at properties so you do not start from a weak negotiating position.
That wasn't my question. My question is-can a real estate agent refuse to ask a question to the seller? Obviously the agent can advise their client and the seller can say whatever they want But its not the real estate agent's call to respond for his client. Its pretty standard to ask sellers if they are willing to owner finance or to even put it in the listing if they are willing. It would be ridiculous to go through a whole bank application and then find out the seller's won't owner finance any of it.
I'm not a lawyer, but my general understanding is that in many/most/all states a listing agent is required to present all writtenoffers to her or his client, the seller.
Wayne--if the real estate agent is a good agent and is trying to sell the home, I would think they would be more than willing to answer any questions the potential buyer has in order to get a sale. Isn't that their job?
agree with you Maria - a good agent looking to sell the property, is going to ask their sellers any reasonable question that a potential buyer has. thats their job exactly. Not really their job to worry about what a lender may or may not do. If i was a seller and my agent didn't present me with a question a potential buyer had, i'd be pissed ! (probably looking for a new agent!)
Yes, the RE agent can refuse to ask a question to the seller. The RE agent has some discretion to screen out lookee-loos. In this case, it seems the RE agent has deemed your situation too unlikely to close to pursue. If you can get a lender to agree, now the deal becomes more viable.
Usually the RE agent will comply with questions from a serious buyer in order to close the deal.
The RE agent must present all offers to the seller. In order for a valid offer, it should have 3 main parts, the property description, payment method, and contingencies.
If you are serious about this deal, put the numbers together and submit an offer with a contingency on satisfactory financing.
It seems ridiculous to make our agents go through the whole offer process if the owner isn't willing to owner finance any of it. Its more work for the agent but if he wants to go that route and create more work for himself...I guess its his call. What's ridiculous is so many investors have the seller owner finance part of the down payment. It is pretty common, so just because the realtor isn't familiar with this doesn't mean he should stonewall the sale of the home and create more work for himself. I'll remember to never recommend him!
@Maria Vogel As you so emphatically stated, your original question was "is the agent required...", the answer is no. You didn't ask if it was smart. Your lender could just as easily tell you if a seller 2nd would even be considered.......if so, then put your offer I writing. As the seller's agent I wouldn't advise them to accept and take the property off the market, unless I talked to Your lender and he indicated it was doable.
You're right Wayne. Its stupid but apparently allowed. My lender is the person who suggested I look for a multi family and ask for the buyers to owner finance. Not on the specific property-he was looking over my portfolio and giving me suggestions.
Hey @Maria Vogel. Put your offer in writing with the terms you are looking for. Remember, many offers come with financing contingencies. So don't let that totally scare you.
Having said that, I would also make a quick call to your lender to see if they are OK with the structure you are proposing.
Many lenders will NOT allow the down payment to be sourced like this.
I'm not a commercial agent but I will say generally, I want things in writing first before I give them to my seller. I want an actual offer to present. X amount of dollars with X amount owner financed over X years payable in X years.
That is an offer I can present (not a hypothetical purchase scenario). Verbal offers and conditions are difficult without something written down. for instance I ask my sellers to refer anyone to me who pulls up and asks questions. At most give them the asking price (say $100,000). The savy negotiator then says well do you think you would take 93,000?
If the homeowner says "yeah I might" guess where the offer comes in .......(87K). The owner did it to themselves by getting into verbal passing conversations.
My job as an agent is to get them the best price I can for a property and getting you to submit an actual offer is the best way to do it. If I verbally told you yes they might then you are not going to go out and get your best offer together. When you have to put it in writing it is an offer not a "wish".
@Maria Vogel as a few others have mentioned, put it in writing. Seems like you are looking at commercial properties in general, so likely your offer will have a similar structure each time you do put it together. That is helpful because even if this seller will not consider it, down the road you can have a template offer to use when trying to get commercial multi with seller financing.
You are a smart investor. As @Chris Mason mentioned you would be surprised at some of the stuff buyers propose.
Thanks for your advice everyone! I talked to our lender, it doesn't sound like it will be a problem so we are applying now. Since its a 6 plex its commercial. I haven't done a commercial loan before. We looked at the place, Its the owner's son-in-law that is the realtor and they are elderly. This is why he was being so protective. However, they are willing to finance $100k at 5% interest, 2 year balloon. We are doing an offer now. Has anyone does this? Owner financed part of the down? What particular terms do you recommend? Interest only? Amortized over 30 years? We are doing a 2 year balloon. I'm interested to see how this works with the lien on the house.