Home sale where seller finances part of the deal

Monello

Yeah, whatever
PREMO Member
Have you ever been involved as either a seller or buyer of a property where the seller held all or part of the note? If so, were you the seller or the buyer? How did the interest rate compare to the going rate at the time? Have you ever been involved where the seller holding part of the note was part of the bid but ultimately rejected?
 

Monello

Yeah, whatever
PREMO Member
No seller financing joy. They did agree to an almost 20% reduction in the asking price.
 

Louise

Well-Known Member
PREMO Member
We are thinking of moving out of MD. What a headache. Montgomery County has been rated one of the worst places to live in the USA. Commissioner Marc Elrich is just like Gretchen Whitmer. Power of it all is all they care about.

Southern MD was awesome. We moved for fam reasons to MoCo. I miss the beauty of it all. We lived off of Broomes Island; which happens to be a fam ancestor history name. Take care, y’all.
 

phreddyp

Well-Known Member
PREMO Member
I have bought a ton of properties using owner financing both residential and commercial , all of the transactions came off without a hitch. The best things about them the mortgage was not recorded which meant credit checks did not know about them and did not lower the amount of credit available to me nor lower my credit score which was a great help running a small business . I was also able to get the seller to accept a lower than market interest rate , worked for me.
 

PJay

Well-Known Member
We are thinking of moving out of MD. What a headache. Montgomery County has been rated one of the worst places to live in the USA. Commissioner Marc Elrich is just like Gretchen Whitmer. Power of it all is all they care about.

Southern MD was awesome. We moved for fam reasons to MoCo. I miss the beauty of it all. We lived off of Broomes Island; which happens to be a fam ancestor history name. Take care, y’all.
Louisiana is calling..

Good luck with move!
 

Clem72

Well-Known Member
Seller financing is great if you can get it, but it's a huge risk for the seller. Typically the seller has to charge at least the IRS AFR (currently 1.69%) or there are tax implications (IRS will treat it like a gift).

But there are of course benefits to the seller as well. No real estate agent commissions and fewer closing costs. I would say interest is a benefit except recently home loans are so cheap that it's a crap investment return vs just dumping the cash in blue-chips.
 

Louise

Well-Known Member
PREMO Member
Louisiana is calling..

Good luck with move!
I would love to move back to Louisiana. Place of my birth. But, my bro’s self sustaining property is in TX. Good luck to you, too, in whatever you decide to do.

 
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phreddyp

Well-Known Member
PREMO Member
Seller financing is great if you can get it, but it's a huge risk for the seller. Typically the seller has to charge at least the IRS AFR (currently 1.69%) or there are tax implications (IRS will treat it like a gift).

But there are of course benefits to the seller as well. No real estate agent commissions and fewer closing costs. I would say interest is a benefit except recently home loans are so cheap that it's a crap investment return vs just dumping the cash in blue-chips.
Where were you during the last 45 years when rates were constantly dropping, great time to do owner financing by the seller .
 

Clem72

Well-Known Member
Where were you during the last 45 years when rates were constantly dropping, great time to do owner financing by the seller .
???

Moving around the county buying, selling, or renting my properties each time I relocated (and did more than one seller finance myself).

Not sure what your point is. Should I provide advice based on historic interest rates, or based on today's? It's a crap deal to lock several hundred thousand dollar of your net worth into a sub 2% return investment, regardless of whether it would have been great to get 9% 20 years ago.
 

phreddyp

Well-Known Member
PREMO Member
???

Moving around the county buying, selling, or renting my properties each time I relocated (and did more than one seller finance myself).

Not sure what your point is. Should I provide advice based on historic interest rates, or based on today's? It's a crap deal to lock several hundred thousand dollar of your net worth into a sub 2% return investment, regardless of whether it would have been great to get 9% 20 years ago.
Really so you don't place a time value on money ? What is viable with a short term loan is not always viable on a long term loan . Maybe you should have explained yourself better or a least acknowledged this in your post. Here's a news flash not all business deals are the same , you have to decide if the risk is worth the potential reward. Of course the risk is usually the loss of some or all of the principal not to mention purchasing power due to inflation . Although I was not into holding mortgages on housing several of my friends were, sometimes they made out during a foreclosure sometimes they didn't the longer the buyer made the payments the better the holder made out on average. I myself never had to do a foreclosure nor was I ever a party to one.
 
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