Seller Financing gets a higher sales price

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Seller Financing gets a higher sales price

H. Jack Miller
Lender · Boca Raton, FL · Member since 2014 · 250 posts · 133 votes

We service seller take back mortgages on investment properties and we have found that sellers can usually  get a higher sales price by holding the financing. I wanted to get everyone thoughts on this?

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  • Max Ferguson
    Real Estate Broker · Denver/Castle Pines/Colorado Springs, CO · Member since 2021 · 248 posts · 136 votes
    2y

    Of course they can get a higher sale price if they are willing to take on someone who cannot get a loan, or are offering better terms than current loan options. More liability=More money as most things in business.

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  • Joe Morello
    Real Estate Consultant · West Palm Beach, FL · Member since 2022 · 40 posts · 11 votes
    2y

    Hi Jack, hope all is well. Good to know that you guys also service seller takeback mortgages. Will keep that in mind! 

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    2y

    @H. Jack Miller

    Probably but there is also a significant risk because these borrowers typically do not qualify for conventional financing so the default rate jumps from what is on average 3-5 % to well over 10%.

    Let’s say you get an extra $10 or $20k, I have seen borrowers do a lot more damage than that to a property as well.

    Pros and cons when charging someone more than what it is worth.

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