The owners of the house next to me came back for a few weeks to evict the tenant and place the house on the market. They own it free and clear. I asked if they'd be willing to seller finance and I fumbled through the explanation of how to do it. We agreed to both research it more and discuss later.
How do I do this?
They did mention they need some immediate cash, no exact amount, and I proposed I could give cash up front and finance the rest with terms. Was that a mistake? Anyone have a script or list of questions or list ways to make the offer?
How much is the rent on the house ? What are you willing to pay? Look up mortgage rates for that price plus taxes insurance etc Estimate how much repairs you would need to make house rent ready .Now figure out how much cash flow you would like and work the purchase price from there Start you offer low like 3% down at 4% interest for 20 yrs and see what the seller will accepts
You did not make a mistake. You got them to think of selling to you and financing it. This is a big victory.
I usually give 6% if they hold the mortgage. It saves you a lot of time and money, that it costs you to go thru a bank. The ease of entry alone is worth the extra percentage points.
What is the asking price? I can tell you how I would make an offer.
Ask questions. "well about how much would you need up front?" If they don't have a clear answer then ask "Is there anything in particular you want the money for?" If they still don't give a clear answer then give them multiple choice. "Well were you thinking like $500, $5,000, or $50,000?"
Ask anything you can think of to find out their situation and what their needs are. Would you rather get a little less money and get this wrapped up in a few years or would you like a steady stream of income for the long run?" "Is it important to move quickly or do you have some time to take care of this?"
You did great! Speak with them regarding what THEIR needs and wants are. Then form the terms accordingly.
(Always try to make the best deal for yourself... You meet halfway, or in your court. )
All, greatly appreciate all the feedback. Any additional will be welcomed and appreciated. I will do as you'll recommended and let you know how it turns out.
I think you took the right steps to this matter. You are helping them solve their problem with less fuss. Any seller in their situation would love that. I believe that you should also let them know that by seller financing they are paying less tax compared to selling the house and receiving full payments.
Present them as many benefits for them as possible and present it in writing.
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