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Rainer
243,524
Caroline Gerardo
CMG Financial - Newport Beach, CA
C. G. Barbeau the Loan Lady nmls 324982

Seller risks headaches- has to send 1099, calculate payments, late fees and maybe foreclose.  Rate should be a tiny bit lower than hard money but high enough that buyer doesn't wait 30 years to pay the seller. Candice A. Donofrio  2 percent higher than government rate isn't worth the risk for seller and headache. I would say 3-4 over government rates with clauses- 6% for 5 years an remaining term 10% amortized over 30 years. No way of telling what rates will be in 6 years for single family and higher for condo by one percent as condo more risk

 

Nov 06, 2017 11:01 AM
Rainmaker
748,576
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

No and maybe.  I actually wrote a little ditty about this . . . since I've done them dozens of times.
The seller becomes the bank . . . if buyer can't get a loan FROM a bank, or a private lender who will crank up those costs and fees to their advantage, expect the interest rate for a seller carryback with NO lender fees to be a percentage point/2/more above the very best deal with a bank and that is probably no deal or they would be going to one. This also depends on the property type. 

Nov 06, 2017 10:18 AM
Rainmaker
3,210,958
Nina Hollander
Coldwell Banker Residential Brokerage - Charlotte, NC
Your Charlotte/Ballantyne/Waxhaw/Fort Mill Realtor

Could not answer that as in 25 years have never had seller financed transaction. But I would expect it to be higher than market rates.

Nov 06, 2017 07:45 AM
Rainmaker
443,902
JoAnn Moore
The Mortgage Market of Delaware - Georgetown, DE
Home Loans in Delaware

Hard money here is charging 11.99% plus 3 points. Most owner financing goes for 6-8%. 

Nov 06, 2017 10:57 AM
Rainmaker
1,263,102
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

It needs to be within a certain percentage of the market rate (in other words, you can't give your friend a 1% interest when rates are 4% or some person you hate a 12% rate).

 

I've only been involved in one of these transactions and that's all I know about it.  Escrow and I believe the seller's CPA advised.

Nov 06, 2017 08:44 AM
Rainmaker
5,118,615
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
Marketing Agent for The Todaro Team

I did many seller financed deals when interest rates were at 18%....  actually they hit 21% for a day or two!!! seller financing and 40 year negative amortizations kept us very busy.... 

Nov 06, 2017 07:58 AM
Rainmaker
1,111,283
Anthony Acosta - ALLATLANTACONDOS.COM
Harry Norman, REALTORS® - Atlanta, GA
Associate Broker

I leave that to the licensed mortgage broker to explain.

Nov 06, 2017 07:57 AM
Rainmaker
780,588
Annette Lawrence , Palm Harbor, FL 727-420-4041
ReMax Realtec Group - Palm Harbor, FL
Making FLORIDA Real Estate EZ

ONLY in "the higher the risk, the more they pay."

Second rule is non-refundable money of sufficient amount to execute an eviction is SMART.

Third rule is ANYONE providing financing for buyer occupied real estate is exposing themselves to great harm.  Buyer occupied financing has received much attention in the legislation passed since the Bank of America caused the last collapse.

An attorney will advise unusual structuring to protect the seller. IF they don't a new attorney is needed.

Nov 06, 2017 07:43 AM
Rainmaker
1,500,632
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Calabasas CA

It is case by case, depends on the relationships and experience. I've seen from very low to up to 20% with penalties. 

Nov 06, 2017 11:20 PM
Rainer
230,518
Mike Rock
Complete Design - Granite Bay, CA
Granite Bay Luxury New Construction...For Less

how much cash is being put in? is it a first or a second? how long? does the seller want it back? lots of questions.. iRS has some guidelines.

Nov 06, 2017 07:43 PM
Rainmaker
1,557,604
Lyn Sims
RE/MAX Suburban - Schaumburg, IL
Schaumburg IL Real Estate

As much as they can get lol. 

Nov 06, 2017 01:26 PM
Rainmaker
744,925
Olga Simoncelli
Veritas Prime, LLC dba Veritas Prime Real Estate - New Fairfield, CT
CONSULTANT, Real Estate Services & Risk Management

No, it's somewhat arbitrary, but definitely higher than what the bank market offers; the risk is higher as well.

Nov 06, 2017 01:20 PM
Rainmaker
5,501,827
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

No. Much will depend upon the intentions and the needs.

Nov 06, 2017 10:06 AM
Rainmaker
2,484,492
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Negotiable

Nov 06, 2017 09:34 AM
Rainmaker
1,040,855
Dave Martin (703) 585-4687
Fairfax Realty - Fairfax, VA
Making Realty Dreams a Reality #WeWillGetYouHome

Just like the rest of the contract its a matter of negotiation. I have seen deals in certain circumstances that were interest free but had a balloon payment due at a specific date.  But as long as its legal and above board anything can be negotiated. 

Nov 06, 2017 09:28 AM
Rainmaker
4,432,467
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Negotiable.

Nov 06, 2017 08:45 AM
Rainmaker
3,127,190
Richard Weeks
Dallas, TX
REALTOR®, Broker

What the market (the buyer) will pay.

Nov 06, 2017 08:28 AM
Rainmaker
3,054,229
Tony and Suzanne Marriott, Associate Brokers
Haven Express @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

Anthony Acosta - ALLATLANTACONDOS.COM nailed this one!

Nov 06, 2017 08:22 AM
Rainmaker
1,367,410
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

It's always negotiable.  So many variables on that.  Would love to have some lenders chime in here.  I would like to know about the legal minimum to charge without the seller suffering negative tax consequences. From what I've read 2% - 4% above the going rate is common.   This would be a good subject for a blog post. 

Nov 06, 2017 08:04 AM
Rainmaker
3,425,360
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

I have had only one client ask about seller financing in my career -- there are so many other options available today.  PS -- that client eventually purchased(twice).  One transaction was conventional and the other was FHA.  

Nov 06, 2017 07:53 AM
Rainmaker
4,571,764
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Probably higher than market rate!  That is my guess.  

Nov 06, 2017 07:47 AM
Rainmaker
576,879
Gloria Valvasori, Accredited Senior Agent
BETTER HOMES AND GARDENS REAL ESTATE SIGNATURE SERVICE - Mississauga, ON
REAL Experience | REAL Commitment | REAL Results!

I have never experienced and situation where any interest would ever be charged to the Buyer.  

Nov 06, 2017 07:39 AM
Ambassador
1,655,781
Joe Pryor
The Virtual Real Estate Team - Oklahoma City, OK
REALTOR® - Oklahoma Investment Properties

None that I know of.

Nov 06, 2017 07:35 AM
Ambassador
4,301,228
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

I rarely come across Seller Financing in our area.

Aug 23, 2018 09:41 PM
Rainer
304,544
Melissa Jackson
Citiwide Alliance Realty - Weatherford, TX
Helping You Make The Right Move

Around here I hear it's about 10%.

Nov 08, 2017 09:39 PM
Rainmaker
1,384,027
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Christine Kankowski North SD and Temecula A couple of points over the Prime Rate.

Nov 07, 2017 07:02 AM
Rainmaker
569,260
Nathan Gesner
American West Realty and Management - Cody, WY
Broker / Property Manager

No, it's whatever the parties can agree to. Some sellers will want a higher rate. Some are OK with a lower rate. 

Nov 07, 2017 05:05 AM
Ambassador
4,366,493
Bob Crane
Woodland Management Service / Woodland Real Estate, Keller Williams Fox Cities - Stevens Point, WI
Forestland Experts! 715-204-9671

Whatever the two parties agree on.

The last time that I did one I charged 18%.

Nov 06, 2017 09:55 PM
Rainmaker
1,035,078
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

no

Nov 06, 2017 09:41 PM
Ambassador
3,983,649
Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

Rates are negotiable and should be determined by the riskiness of the borrower and how much upfront money you get. There is no right and wrong other than what is right and wrong for you.

Nov 06, 2017 07:55 PM
Rainmaker
3,983,713
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

Theinterest is basically what the market will bear

Nov 06, 2017 04:28 PM
Rainmaker
758,722
Jeff Pearl
RE/MAX Distinctive / LIC in VA - Lovettsville, VA
Full Service Full Time Realtor

It's negotiable, but shouldn't unrealistic. Last one I did was for 8%.

Nov 06, 2017 03:50 PM
Ambassador
2,363,840
Fred Griffin, on leave of absence from ActiveRain
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

 Higher than market. 

 

Nov 06, 2017 03:29 PM
Rainmaker
3,363,721
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Not really. It is negotiable! But pay attention to the imputed interest rules!

Nov 06, 2017 03:09 PM
Rainmaker
479,001
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

All things are "negotiable" in real estate and then have an Attorney write up the agreement.

Nov 06, 2017 03:04 PM
Rainmaker
4,797,822
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

I don't know.

Nov 06, 2017 02:43 PM
Rainmaker
2,826,286
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale-Probate & Trust Specialist

Above market is very common.  

Nov 06, 2017 02:35 PM