Updated about 8 years ago on . Most recent reply
- Real Estate Broker
- Columbus, OH
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Guaranteeing Sellers Exit by Offering Inflated Purchase Price
I have a seller-finaced duplex that I am negotiating currently. Sellers are generally good on mortgage/note terms, but are seeking more security. I am ok offering a purchase price slightly higher to compensate for the estimated discount they can sell the note for. Has anyone used this technique to complete an acquisition.
Moreover, what type of guidance would you give the seller to sell this note as quickly as possible?
- Brandon Sturgill
- 614-379-2017
Most Popular Reply
Brandon Sturgill
Be careful. Not sure why you would pay more, but be reminded that an offer on a note is typically based on the Lower of the UPB and value of property. If property is worth $100k and you bump the price up to $120k that typically will not get the note holder more $
If you want to increase the value of the note the way to do it is increase the rate. A note of $100k with 9% interest is worth more than a note of $100k at 6% interest
- Chris Seveney
