Is seller financing more appealing with higher interest rates?
Real Estate Agent · Fort Campbell Kentucky · Member since 2023 · 7 posts · 0 votes
Is seller financing more appealing with higher interest rates?
Most Popular Reply
Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
3yI see a lot of gurus telling people how easy it is to get people to seller finance, but its really hard. I'm in the Tampa Bay area and the market is still going strong. If the property is priced right and there isn't something seriously wrong with it, they will get offers on the property. Sometimes a property owner will want a lot more than people are willing to pay for the property. In that case they might seller finance it. If there's something seriously wrong with the property and they can't sell it, they might seller finance it. If the property is in good condition and priced right, it will move without them having to carry a note back on the property. Deals are there, but they aren't as prevalent as the gurus let on. I have a lot of these people that we're working in a totally different field prior to getting into selling courses touting how easy it is. It's not. It can be done, but it's not as easy as they make it out to be. The other things I invite you to do is, before you take advice on this or any forum...or from a guru...is to look up their background and see if they really know their stuff or if they simply want to sell snake oil. You'll be stunned at what you find. Good luck to you.
13 Replies
- Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes3yOf course seller financing will work with some people. The reason agents don't like it is because you haven't explained to them how the listing agent and buyer agents get paid. That's why they work. They want to get paid. If you can't get them paid, why would they work with you?
Quote from @Max Ferrel:
Most agents I talk to seem to think seller financing is dead in my local market. I personally want to use this strategy to lock in a lower interest rate on a rental property (being 20 years old with a small amount of credit history). What is your thought on seller financing right now? What are some strategies that have worked for you to lock in a seller financed deal?
- Real Estate Agent · Fort Campbell Kentucky · Member since 2023 · 7 posts · 0 votes3y
Quote from @Account Closed:
Of course seller financing will work with some people. The reason agents don't like it is because you haven't explained to them how the listing agent and buyer agents get paid. That's why they work. They want to get paid. If you can't get them paid, why would they work with you?Quote from @Max Ferrel:
Most agents I talk to seem to think seller financing is dead in my local market. I personally want to use this strategy to lock in a lower interest rate on a rental property (being 20 years old with a small amount of credit history). What is your thought on seller financing right now? What are some strategies that have worked for you to lock in a seller financed deal?
(Pretty much brand new too real estate)
How would real estate agents get paid through a seller financed deal?
- Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes3yYou write a check at closing, out of "cash on hand". I can't imagine a seller would agree to cover the cost out of pocket if they are doing seller financing, unless they had money and were desparate.
Quote from @Max Ferrel:
Quote from @Account Closed:
Of course seller financing will work with some people. The reason agents don't like it is because you haven't explained to them how the listing agent and buyer agents get paid. That's why they work. They want to get paid. If you can't get them paid, why would they work with you?Quote from @Max Ferrel:
Most agents I talk to seem to think seller financing is dead in my local market. I personally want to use this strategy to lock in a lower interest rate on a rental property (being 20 years old with a small amount of credit history). What is your thought on seller financing right now? What are some strategies that have worked for you to lock in a seller financed deal?
(Pretty much brand new too real estate)
How would real estate agents get paid through a seller financed deal?
- Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes3y
That’s the downside.
1) Lots of people who say they want “seller financing” really want low/No downpayment. If you put down 10% the seller will probably get nothing, it will all go to selling costs. So unless they really need to sell and they believe they wont incur further costs getting you to pay or taking the property back when you don’t. (Since they will actually be in a worse position then than not selling.) they should ask for 30% or more down, which will give them 20%. 10% of that might be required to sell again.
2) if you can earn 5% or more guaranteed in the bank, what would you require from a stranger where it will cost you 10% to take back the loan and resell to get your money back? 7% 9%? I MIGHT be interest at 12% for 1-5 years, with 30% down. IF I had ZERO conventional buyers.
Back when the bank was paying 0.01% and mortgages were 4% you could offer 4%. That’s 400 x what they could get in the bank. Now you’re offering 1.5x? Less?
- New to Real Estate · Cincinnati Ohio · Member since 2022 · 5 posts · 9 votes3y
Something cool about create finance is you can take advantage of properties purchases in markets easier to buy in. I'd suggest looking up Pace Morby and his book Wealth Without Cash.
- Real Estate Agent · Fort Campbell Kentucky · Member since 2023 · 7 posts · 0 votes3y
Quote from @Account Closed:
You write a check at closing, out of "cash on hand". I can't imagine a seller would agree to cover the cost out of pocket if they are doing seller financing, unless they had money and were desparate.Quote from @Max Ferrel:
Quote from @Account Closed:
Of course seller financing will work with some people. The reason agents don't like it is because you haven't explained to them how the listing agent and buyer agents get paid. That's why they work. They want to get paid. If you can't get them paid, why would they work with you?Quote from @Max Ferrel:
Most agents I talk to seem to think seller financing is dead in my local market. I personally want to use this strategy to lock in a lower interest rate on a rental property (being 20 years old with a small amount of credit history). What is your thought on seller financing right now? What are some strategies that have worked for you to lock in a seller financed deal?
(Pretty much brand new too real estate)
How would real estate agents get paid through a seller financed deal?
Thanks for the info! Do you have any personal methods to finding and locking in a seller financed deal?
- Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes3y
Creative financing is where the most opportunity is right now. Who ever says it is dead does not see many deals.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes3yIt could be dead depending on the market. My market its very rare to see seller financing because people do not want to be lenders they want the cash and walk away. Reasons a seller may want to seller finance (and its typically not to avoid taxes as many think) are:
Quote from @Max Ferrel:
Most agents I talk to seem to think seller financing is dead in my local market. I personally want to use this strategy to lock in a lower interest rate on a rental property (being 20 years old with a small amount of credit history). What is your thought on seller financing right now? What are some strategies that have worked for you to lock in a seller financed deal?
1. The house has major issues and they just want to get rid of it
2. Someone will overpay for the home and thats how they get the best price
Typically seller financing the rate is not lower, if it is then 1 or 2 apply above.
7e investments53 Reviews - Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes3y
I see a lot of gurus telling people how easy it is to get people to seller finance, but its really hard. I'm in the Tampa Bay area and the market is still going strong. If the property is priced right and there isn't something seriously wrong with it, they will get offers on the property. Sometimes a property owner will want a lot more than people are willing to pay for the property. In that case they might seller finance it. If there's something seriously wrong with the property and they can't sell it, they might seller finance it. If the property is in good condition and priced right, it will move without them having to carry a note back on the property. Deals are there, but they aren't as prevalent as the gurus let on. I have a lot of these people that we're working in a totally different field prior to getting into selling courses touting how easy it is. It's not. It can be done, but it's not as easy as they make it out to be. The other things I invite you to do is, before you take advice on this or any forum...or from a guru...is to look up their background and see if they really know their stuff or if they simply want to sell snake oil. You'll be stunned at what you find. Good luck to you.
- Real Estate Agent · Fort Campbell Kentucky · Member since 2023 · 7 posts · 0 votes3y
Quote from @Doug Smith:
I see a lot of gurus telling people how easy it is to get people to seller finance, but its really hard. I'm in the Tampa Bay area and the market is still going strong. If the property is priced right and there isn't something seriously wrong with it, they will get offers on the property. Sometimes a property owner will want a lot more than people are willing to pay for the property. In that case they might seller finance it. If there's something seriously wrong with the property and they can't sell it, they might seller finance it. If the property is in good condition and priced right, it will move without them having to carry a note back on the property. Deals are there, but they aren't as prevalent as the gurus let on. I have a lot of these people that we're working in a totally different field prior to getting into selling courses touting how easy it is. It's not. It can be done, but it's not as easy as they make it out to be. The other things I invite you to do is, before you take advice on this or any forum...or from a guru...is to look up their background and see if they really know their stuff or if they simply want to sell snake oil. You'll be stunned at what you find. Good luck to you
There is a lot of mf properties in my local area that have been just sitting on the market due to poor pricing, I am going to try and reach out to them individually and see if we can work something out. thank you for your response!!
- Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes3yThat's great. I hope it goes well.
Quote from @Max Ferrel:
Quote from @Doug Smith:
I see a lot of gurus telling people how easy it is to get people to seller finance, but its really hard. I'm in the Tampa Bay area and the market is still going strong. If the property is priced right and there isn't something seriously wrong with it, they will get offers on the property. Sometimes a property owner will want a lot more than people are willing to pay for the property. In that case they might seller finance it. If there's something seriously wrong with the property and they can't sell it, they might seller finance it. If the property is in good condition and priced right, it will move without them having to carry a note back on the property. Deals are there, but they aren't as prevalent as the gurus let on. I have a lot of these people that we're working in a totally different field prior to getting into selling courses touting how easy it is. It's not. It can be done, but it's not as easy as they make it out to be. The other things I invite you to do is, before you take advice on this or any forum...or from a guru...is to look up their background and see if they really know their stuff or if they simply want to sell snake oil. You'll be stunned at what you find. Good luck to you
There is a lot of mf properties in my local area that have been just sitting on the market due to poor pricing, I am going to try and reach out to them individually and see if we can work something out. thank you for your response!!
- Investor · Tampa, FL · Member since 2020 · 287 posts · 152 votes3y
Owner financing is always a great option it is just a matter of education, if you can explain to them the benefits and lay out in a simple to see way how much more money they will make in the long run, you would be surprised at the terms people will agree too. I tend to ask them what they plan on using the proceeds of the sale for and if they have thought about being the bank and making that interest themselves instead of a bank. You can PM me for more details I can walk you through it I have several templates as well.
- Member since 2024 · 1 post · 0 votes2y
Quote from @Joseph Stern:
Owner financing is always a great option it is just a matter of education, if you can explain to them the benefits and lay out in a simple to see way how much more money they will make in the long run, you would be surprised at the terms people will agree too. I tend to ask them what they plan on using the proceeds of the sale for and if they have thought about being the bank and making that interest themselves instead of a bank. You can PM me for more details I can walk you through it I have several templates as well.
Would you be able to share template with me?
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