How To Ask For Owner Financing

By Anita Wilson

After you find a property that is for sale by owner, make an appointment to view it. Sit down and talk with the owner. Even if they have a realtor, tell the realtor you would like to make an offer on the property but you insist on meeting the owners first.

If they say no, then you can always look the owner up from court records and contact them that way. But once you get face to face with them just talk. Don’t go in trying to be the big time real estate investor spouting off about their property and what you can do for them.

Go in as a buyer with limited but stable ability to pay, but tell the truth. At this point it will be your personality and sincerity and honesty to sell yourself to the owners. Just be yourself.

Ask them why they are selling, find out how long they have had it, ask about the kids and how they will feel about them selling their family home. Tell them about you. Tell them you have a really great job or are self employed but maybe when you were younger or due to divorce, your credit got shot, but you can pay. Yu just need a chance.

Speak plain and don't try using real estate terms. Tell them you can afford the payment comfortably but you do not have money for the down and/or closing cost. Tell them that if they would be willing to raise the price to cover the amount of the down:

Price 90K
Down Payment 10K
Closing 3K

That would mean they raise the price to 103K and they pay the closing cost at escrow, then you would be willing to pay a slightly higher that going interest rate:

6.85% Current Interest Rate
7.5% - 10% With Owner Finance

You would be surprised at how simply asking works so well, as opposed to trying to wheel and deal and out thinking them works. Here are a few points to keep in mind when working with a FSBO:

1. Always meet the homeowner with a pleasant attitude

2. Be respectful but ask for a walk through before you sit down and talk

3. Make silent note (meaning write it down but don’t talk about it) of any repairs that you see that may need to be made.

4. Share a little info with owner about yourself first, like why you are looking to buy. This will put them at ease with you.

5. Once sitting down to discuss, do not be aggressive, ask simple questions at first like why they are selling, comment on what a nice house they have but if repairs are needed simply ask them in a way that will not seem accusatory, like .... I noticed the back porch has some boards loose, will you fixing that or are you just selling as is? With that simply question you just found out if they were willing to make repairs or not, without offending them regarding the condition of their home. Remember these people live there, this is THEIR home and they can be easily offended if you start in on them about how much work needs to be done, so use something like the question above to ease into it. If they say yes, they will be fixing that, ask them what else will they be fixing. If you notice the shingles on the den needed to be replaced, ask them, at that point will they also be fixing the roof, if not then that may be a great negotiating point. Try something like,.....well since the roof need to be repaired, how about I get an estimate on that before I give you my offer and whatever that cost is I can just deduct it, because I know you are trying to move on as soon as possible and I would hate to see you held up because of a roof repair. I actually think I may know someone that could take care of that pretty fast. Is there any thing else that is major that needs repairing? With that question you have just shown consideration, understanding and a sincere interest in their property, but you have also just opened the door for them to tell YOU what else need fixing.

6. Always look them in the eye and just be honest. If you are buying to rent out as investment property, just tell them.

7. Whatever their reason for selling, the fact of the matter is, they have something you want, so once you find out what their reason for selling is, figure out if YOU have something they want.

8. Be creative, ask about they types of financing hey will consider. Just because it is for sale by owner does not mean they are OWNER FINANCING.

9. If you are wanting to assign it, tell them that, but phrase it to make you look good in a positive way. Most will accept your purchase offer once you explain what you do and how you do it.


Well that’s all on this for now. Give it a try on a FSBO and see how it goes.


Jan Malek's picture

How true this article is. I just lost out on a FSBO property for the simple fact that I thought I was talking to another REI and they were just plain folk. Don't get me wrong, I was was very respectful and sympathetic as to why they were selling, but my months of studying got the best of me. We must learn to sit and listen and ask the right questions when they should be asked. I have just learned a very important lesson, and that is to just BE MYSELF....Jan

owner financing

This article was just what I needed to get me started on a property I have wanted to buy for a year now. The owner has gotten frustrated with the market and has now pulled the property from the realtor listing! I have always FELT this house should be mine, but do to a tragic accident 10 yrs ago (just settled in court) my credit isn't as impressive as I'd like it to be. Thank you for giving me the direction I need to move forward with an offer!! Maria

owner financing

i think this article is awesome. it has told me how to approach the owners and how to act.i can't wait to get started on my first fsbo!!!geo

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