Seller Financing how to include 3 percent real estate commission

Member since 2020 · 1 post · 0 votes

I am looking to purchase a house at $389,000 with seller financing. I wanted to know the best way to structure the deal with only $10,000 down for 25 years. The listing agent would need 3% commission. How do I structure the deal to cover the agents real estate commission?

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Joseph CacciapagliaBusiness Member
Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
6y
You have a few options:
1. You can ask the seller to come out of pocket. This is a tough ask, so you have to gauge the seller.
2. You can bring more cash yourself. Not ideal, but if you're only putting $10K down, it's not unreasonable to bring some additional cash to make closing work.
3. You could ask the agent to take their commission as a note. Depending on the state laws and their broker's rules, they may not be allowed to do this. I would offer a decent interest rate on this, to make them a little less unhappy with the situation.
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Tim Winter
Broker · Phoenix, AZ · Member since 2015 · 151 posts · 55 votes
6y
I was going to respond to this, but @Joseph Cacciapaglia nailed your options. And kudos to you for not cutting your agents commission, which I'm assuming is the one that brought you the deal?

I personally would do the note no problem, to help with your cashflow. You might need to split the amounts (enough to the broker to cover their cut, and balance note to the agent.) But as mentioned previously, $10k down is a screaming deal, as that's only 2.5%... traditional financing in the current climate you'd have to bring 10x to the table. I'd make everyone in that deal happy no matter what it takes to make sure you take this one down. (BTW, do you mind my asking where/location wise did you find such a deal? Sounds like I need to start investing in your area! :)

Best of luck, and happy hunting!
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