Seller Financing and two agents

6 Replies

I am new at investing and have not worked with an agent much so not sure what is considered normal practice. 

Mistake #1 I wanted information on the listing that I saw on Zillow and so I just submitted a question rather than contacting the listing agent directly. 

Another agent has contacted me and has chased down a few answers to a few questions that I had and now is eager to take me to go see the property. 

I have gotten the information that this is an older seller that is down sizing her portfolio. In my mind, the prime individual to have a mutually beneficial seller financing agreement with. (I have access to conventional financing but would like to pursue this first)

If she would be open to a minimal down payment, how do we slice the pie into enough pieces to go around? Do I have any obligation to the agent that has helped me already? Should I just be open with him and tell him the situation and tell him I will go directly to the sellers agent at this time? Ask his permission? Any way for everyone to get a good deal? I guess I'm not even sure with an average commission rate is. I just don't want to lead "my" agent on if it is in neither his nor my best interest to continue the relationship. 

@Kyle Koehn

The seller pays the commission. It's not really a concern for you unless this is a for sale by owner and they refuse to pay one.

@Christopher Phillips You can look at it both ways. To have a truly successful offer I need to solve the sellers every problem and concern. Or at least as many as I possibly can. If there is not enough cash in the deal to go around to all the pockets, I at least, would be less enthusiastic about the deal if I as the seller had to dig into my own pocket and bring cash to the table to close the deal. So I guess I am choosing to make it my concern. Or imagining the seller will want at least as much down payment as all of her direct expenses. So if I can minimize the expenses (without causing PR snafus) up front, then that's what I am looking at. 

The seller is paying the commission, probably 6%, whether there are two agents involved or just one, as per their listing agreement with the listing agent.

Aside from that, mls listings are not the best candidates for seller financing.....their cost of sale with closing, etc will be about 10%.

Ok. thanks. I had thought about offering around 10% down. Guess we will see how it goes. 

@Kyle Koehn

That would only work if it was off market.

The listing ageeement is already in place. So, you’ll have to make an offer that works for the situation.

The agents or their brokers might be willing to get paid via a promissory note and junior mortgage on the property. Or you find somebody willing to put up the commission money and they get the note and mortgage.

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