OfflineWell if you have read any of my other post they you know that I am a firm believer in ASKING. So here goes.
How To Ask For Owner Financing.
After you find a property, 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. Dont 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.
Well thats all on this for now. Give it a try on a FSBO and see how it goes.
Anita
"Just Do It!"
This information is great. One reason sellers will not do seller financing is because they are looking to get money now. Money for down payment on anothe home, money for a car, money to pay off debt. You may be able to ask what they are looking to do with money then see if you can just pay for what they are looking to get into and do seller financing for the rest.
Another idea would be to introduce selling their seller financed note to a private note buyer. There are hundreds of them throughout the state. Lawyers, CPAs and the likes are often the best that will buy notes.
I would have mentions the selling of the note but I thought it may have added to the confusion of the newbies, but I keep in contact with a whole list of people that buy notes and thats a whole other real estate business within itself. Thanks for your input, its always so perceptive.
Anita
"Just Do It!"
Hi Anita,
I understand the Owner Financing & why you would ask the seller to raise the price so you have no out of pocket. Is this all under the assumption that the buyer is a qualified motivated seller and has listed the property below FMV of at least 80% or more?
Thank you & God Bless!
Love, Light & Blessings,
Darlene
It is under that assumption. But there are many other facets to consider so just know as much about the property as possible to you will be on better footing when meeting with the owner. It gives you a little more leverage.
Anita
"Just Do It!"
Thank you for making that clear, I appreciate your advice
God Bless
Love, Light & Blessings,
Darlene
I gotta agree with you. I met the owners of the house I currently own before buying it and they were the nicest people. They left me all the appliances, paid for the home warranty, most of the closing costs, sold me a house full of furniture for $600 (thank God because my furniture didn't arrive for three weeks) AND they showed me how to take care of the pool and run the equipment properly as well as some other things. I wouldn't have gotten any of those extras if I hadn't made the effort to meet them and build raport. It's the key to successful investing in my opinion! They even left me a card wishing me many years of wonderful memories in my new home, that was a first!! Oh I forgot to mention, they also gave me several set of keys, good thing they did because my closing was delayed by another two weeks and we had nowhere to stay so we were able to stay there until it was official. (Not legal but we had NO choice). So this was by far my most pleasant and memorable transaction with rei.
Psalms 118:23 "This is the LORD's doing; it is marvellous in our eyes."
For the back up post Elena
Anita
"Just Do It!"
Hi Anita,
Wow! It takes a lot of pressure out of negoiating with the seller. It creates a more relaxed atmosphere. We definitely need to be relaxed in todays sometimes chaotic world. And it sounds simple and straight forward.
And I love how you by-passed the agent by locating the owner through county records (if necessary).
Fantastic!
Thanks.
__________________________________
Michael B
We made an offer on a 4-plex last week and I asked the owner (corporation) to finance it but they turned me down, then I asked them to finance the down payment and they turned me down.
In the end, we accepted their counter offer and we close in three weeks but I am happy we asked and at least attempted to find other funding!!!!
Regards,
Rohn
DeJor Properties, LLC
thanks for the comments, it great knowing that we actually put what we read to work isnt it.
Anita
"Just Do It!"
I am new to this site and am wondering if asking for owner financing when a house is listed with a realtor is uncommon? How is the realtor's fee worked into this scenario?
"Whether you think you can or can't, you are probably right" Henry Ford
In my experiance with seller financing, the seller usually asks for enough down payment to cover their expences. The seller will need to pay the RE Agents as laid out in their listing contract. So they either pay out of pocket or get enough from the buyer to cover the fee.
Al
"NOW GO FIND A DEAL"
Would you look at the house first through the realtor to see if you even like it OR would you contact the seller first to see if there is even a possibility of seller financing as I am pretty sure I have no way to get a loan even though I have an exceptionally high credit score..I don't have a real job. I do have experience..3 other rentals that were homes I lived in and then rented out and great credit but no "real" income per se. Any other suggestions are welcomed as I am new to this creative style of investing in real estate.
"Whether you think you can or can't, you are probably right" Henry Ford
If a property is not listed with a Realtor why bring one in? If you use a Realtor on a FSBO (for sale by owner) you add 3-6% additional expenses for yourself. If you have a chance to talk with the owners I would always suggest this.