Posted by Ed Copp (OH) on March 09, 2001 at 15:24:13:
Your offering of $235K is inflated by about $35K. Seems like the house is really worth about $200K from what you have posted. The $200K would be a cash price with the buyer bringing all the money to the table (it really does not matter where he borrowed it)
Now if you provide the financing then you are entitled to inflate your price some. In my opinion $35K is a bit of a gouge (and you will probably want higher than market interest also). It is however customary to charge more to the people who have less… I think it is called the American way.
You ask how to make this work, and the answer is that the house is most likely worth $200K cash, anything over that amount is to be considered somewhere between wishful thinking and a daydream.
It is worth noting that the $200K value (comps) would also include a local customary real estate commission, (about $12K) in my area. So the net on the house would really be about $188K. If you earn the real estate commission by all means keep it, however expect a savvy buyer to also want to “keep it”. If I was paying CASH, it is a sure thing that I would not “pay you” a commission for finding me, A “cash buyer”.
So how can you make this work? The answer is take a FAIR and realistic price of between $188K and $200K CASH, or design some kind of owner financing that works for both you and the buyer. Don’t hold your breath on a deal that is inflated by 17-20%, while looking for a super buyer who just happens to have little or no money.