I have several people interested in selling their properties but I am kind out of tools on how to negotiate if they do not agree with my offer. I've been told seller financing is a way to steer the negotiation on my favor offering full price for the property but on my terms. I really have no experience or knowledge on how to draft a seller financing deal. Can someone share their knowledge and experience and maybe provide examples on how to draft/shape an offer where seller financing is involved. I do appreciate your input and advice.
My eperience in writing up owner finance offers is from a Realtor's point of view (i am a realtor /investor). Take the purchase price minus the down payment and calculate that remaining balance on a mortg calculator. I would offer an interest rate close to what a bank would charge you ( from my experience some sellers want a higher rate than banks because they are doing you a favor in financing the property). Amortize the loan for 15-30 years to get the payment reasonable. I usually include a balloon payment to be due in 5-7 years. At that point you can go to a traditional bank and refinance. Maybe this helps you out some. Good luck.
With owner financing on a 5 year call I also put a clause in for renegotiating terms and continue the owner financing. I have renewed the financing with the mortgagee on several occasions because I was always early on my payments and never missed one. The mortgagee was happy to continue the loan. Or just refinance at the end of the period if you have substantial appreciation built up with equity and use the extra money to purchase more properties.
how would you determine the monthly payment so it makes sense for the amount of rent in the area. Can someone walk me through the math?
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