How does Seller Financing work!?

2 Replies

Hey BP! I’m looking to purchase a property with Seller financing. For Instance, purchase price $550K with Escrow, Title, and Listing Agent fees. How is the promissory note look like and how do the fees get paid? Out of pocket for the Seller fees (Escrow, Title, and Agent). Sales a price $550K w/2.5% down at a rate of 4% with a balloon payment in 5 years.


Someone has to provide some cash to pay the transaction fees.  Your 2.5% may cover everything the title company needs to close out the deal.

My bigger concern was the comment you made on the terms.   It would be dangerous to have 97.5% leverage on a 5 year balloon.   Did this property appraise for higher than $550K?  If not, you may want to have language in your seller financing for a contingency to extend the loan another 5 years.