Seller Financing: 3 Tips to a Smooth Deal

If you are considering selling a property through the use of seller financing, there are a number of things that you will want to keep in mind. Here are some tips to remember when you want to have a smooth deal with seller financing.

1. Get Everything in Writing

Much of the seller financing process revolves around negotiation between the buyer and the seller. Whenever you are negotiating with the other party, you need to make sure to get anything that is discussed in writing. Many times, a miscommunication can lead to substantial problems when drafting the official loan document later on. By getting everything in writing from the very beginning, you will be able to avoid any potential discrepancies.

2. Negotiate a Down Payment

In order to sell a property with seller financing, the buyer needs to provide some type of down payment to the seller. This amount is negotiable and should be agreed upon by both parties. As a general rule of thumb, the buyer should provide at least 10 percent to the seller in the form of a down payment.

3. Avoid Interest-Only Loans

If you are the seller, you will want to stay away from offering interest-only loans. These loans do not allow the buyer to accumulate any equity in the property. This makes it more likely that they will walk away from the property in the future.

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