KNOW THY TERMS WHEN OFFERING SELLER CARRYBACK ON LISTINGS

By
Real Estate Agent with Precision Real Estate Inc. SA535849000

KNOW THY TERMS WHEN OFFERING SELLER CARRYBACK ON LISTINGS

SELLER FINANCINGIt seems seller financing is becoming a favorite option when listing homes for sale in your local Multiple Listing Service(MLS). I am very familiar with seller financing since I have been working with real estate investors for the past ten years since I have been a Realtor. However, I have noticed many other Realtors do not understand how to put this type of deal together for real estate investors. That could cost the investor down the road if the contract terms are not written correctly.

I was showing a home this past week that stated "SELLER WILL ENTERTAIN SELLER CARRY-BACK." Great! My clients have the down payment and are willing to do seller financing until they correct their credit over the next couple of years. So, my buyers were ready to pull the trigger. The house is perfect for the entire family. It is close to parks, schools, shopping, restaurants and highways. The home itself has a new roof, new AC and hot water heater. This sounds too good to be true. Now, I place a call to the listing agent.

ME:Hi, I am interested in your listing on 123 Main Street. Please tell me more about seller carry-back terms.

AGENT:Well, most people require 20% down. Do they really want seller carry-back?

ME:OK-I am asking what the seller carry-back terms for 123 Main Street only.

AGENT:Well, just Email me an offer and I will present it to the seller.

I got off the phone with the agent. I heard this hissing sound in the back of my office like a tire was going flat. How can you list a home offering seller carryback and not know the terms? So, I offered the following terms to low ball it

  • 10% down
  • 9% interest only payment
  • 5 year note
  • Starting sales price at 80,000 with a 3% bump each year for final sales price
  • One year prepayment penalty

So, I Emailed this offer to the listing agent thirty minutes later. I call the agent the next day to follow up on my offer.

ME: Hi-I emailed my offer to you as you instructed. Were you able to present to seller?

AGENT: Well, I will be with the seller later on today. He is a very busy person

ME: OK-I am a very busy person myself. All I am trying to do is to put a deal together. Are you going to assist me or do I need to move on?

AGENT: I will get back to you later. Thanks

TIRE PATCH KITI will be sending this agent a TIRE PATCH KIT so other deals do not fall apart.

 

 

DISCLAIMER: NAMES AND OFFICIAL ADDRESSES HAVE BEEN CHANGED TO PROTECT THE INNOCENT. TIRE PATCH KIT ON SALE AT YOUR LOCAL WALMART. 

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Topic:
ActiveRain Community
Location:
Arizona
Tags:
seller financing
phoenix rent to own

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Rainmaker
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Kim Sellers
Lake Arrowhead Realtor - DRE#01412099 - Lake Arrow
Lake Arrowhead, CA Coldwell Banker

Knowing the terms is vital to representing your seller or buyer.  They are easy to do, but you need to know what you are doing for sure.

February 06, 2011 10:08 AM
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Harry F. D'Elia
Investor , Mentor, CSSN, Radio Coach, REOs, ABR
Precision Real Estate Inc.

Kim-key phrase-you have to know what you are doing-right on

February 06, 2011 10:10 AM
Rainer
188,478
Eric Villaverde
DoubleTree Home Inspection Services L.L.C.

It makes sense to me

February 08, 2011 12:19 AM
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Additional Information

Intended to share information, ideas, and tips on buying and selling real estate in Phoenix, Arizona. Written by realtor and radio host, Harry F. D'Elia. This Blog focuses on the creation of wealth through real estate and is involved in teaching others how to conservativley buy and sell real estate to enhance one's current portfolio. Agent's are welcome to follow along and learn from Harry how to successfully meet your clients needs.