How to prepare for owner financing

Question

How should I get prepared to ask a seller to do owner financing?

I am interested in a property that has been in the market for 3 months. The owner had to move out of town so I can not talk to him in person. I also know he has own the house for 9 years and he bought it at about 55% of the price he is asking now.

I was wondering if I should prepare some kind of excel sheet with numbers, or talk to an account/lawyer first to help me out? As well should I do the process through the realtor or should I ask the realtor to give me his contact information?

If you have any other tips please mention them as well. Thanks :)

Bo Goebel · Answer

Most importantly, ask the right questions to find out what the seller's wants and needs are. Be authentic and transparent. Start there, and if owner financing aligns with his goals then it's not a difficult sell. That is when I'd pull out the different options, first verbally and then shoot over a spreadsheet if he or she is interested. (You should definitely run numbers prior to talking to the seller).

The options I would list are 1. the price you could pay if you did not have any owner financing2. The price with a small portion of owner financing (with a down-payment interest rate that you believe to be competitive 3. The terms including a more significant amountEX) List price $250,0001. I can pay $195,000 conventionally2. I can pay $230,000, $20,000 down and pay you $210,000 over the next 15 years at a 5% interest rate, which is a monthly payment of $1,6603. Any other scenario you would like. Obviously, I have no idea what your actual numbers are.

The title company can help with the closing docs, including the promissory note. "Due on sale" can be enacted if the seller currently has a mortgage on the property... in which case it would be better to keep in the seller's name.