Posted by B.L.Renfrow on May 05, 2000 at 08:01:17:
First thing is to talk with them enough to know whether owner financing would even be a viable option. As I said, it depends on their needs. If the seller needs cash for Aunt Lizzy’s brain transplant, there’s no point in discussing alternatives to an all-cash sale.
If it sounds like something which might be do-able, I will tell them there are several ways I can buy their home. I will always discuss an all-cash sale (at a severe discount, of course). I will talk about subject-to, if that is a possibility. I will present owner financing as something which will give them more money than any other scenario, but they will get it over time. I talk about how they will be the bank, and they will be getting all that interest, not some greedy bank. I will actually write down how much they stand to receive over the life of the loan, in big figures, and put the pad in front of them.
Then I shut up. When they ask about the security of their loan, and what happens if I don’t pay, I explain (and they WILL ask. If they don’t, then I bring it up). Of course, I tell them first off that since I am in a small town, if I made promises I couldn’t keep to home sellers, it wouldn’t take long before no one in town would do business with me. That is very true, and they can usually see the point. I tell them how if I did default, they could get the property back and do it all over again and keep whatever they had received. Naturally, I keep hammering the point that that is about as likely to happen as aliens are to land in their front lawn.
The typical response is to say no, or they will think about it. That’s fine. I tell them to call me if they have any more questions. Most do. I will leave them with a sheet from my legal pad with the three alternatives summarized, making sure the money figures appear prominently. The longer they stare at that high figure (the owner-financing one) the more likely at least some of them will go along with it.