Is seller financing a buyers dream?
Is this ideal for buyers? Do you aim to get sellers financing for multi family properties you buy? Can someone explain how this works and the pros/cons of your experience. Thanks. 
[{"id": "edpj3zk", "text": "Completely depends on the terms of the loan ", "replies": [], "depth": 1}, {"id": "edpqlgz", "text": "More expensive usually. ", "replies": [], "depth": 1}, {"id": "edq535t", "text": "It's almost always for a short term with a big balloon, so you'll need to plan to refi before too long.  It can be beneficial to you if you have trouble getting immediate financing, but the thing about a Real Estate Contract is, in many jurisdictions the deed to the property won't actually transfer to you as the buyer.  Meaning the seller has a LOT more leverage on you than a lender would.  It could be as harsh as, miss a payment, and the property reverts back to the seller completely.  No foreclosure, no negotiation, just goodbye and good riddance.  Granted, that's extreme, but it can and sometimes does work that way.", "replies": [{"id": "edqbexm", "text": "How? That\u2019s rent to own not seller financing ", "replies": [{"id": "edquscx", "text": "No, it's a real estate contract.  You record a contract that says, buyer pays seller 20%, 40%, 50% down or whatever, and then pays $x,000 per month at x% interest, with the balance due in 3 years, 5 years, etc.  But the deed doesn't change hands until the contract is completed, so a seller can have a clause in there with very harsh penalties for missing an interest payment.", "replies": [{"id": "edr61wh", "text": "Then it\u2019s rent to own. It\u2019s still seller financing but it\u2019s not traditional seller financing. Traditional seller financing is the seller selling the building and then transferring the title and then holding the note on it. They still have to foreclose like a bank. In essence the seller sells and then becomes the bank", "replies": [{"id": "edrzqjv", "text": "No.  Rent comes from a lease and the tenant gets no interest in the property.  An REC is an agreement to purchase and the money goes to equity and interest.", "replies": [{"id": "eds0jcu", "text": "If that\u2019s the case then it\u2019s highly disadvantaged to the seller unless they expect or want the buyer to default. There\u2019s no sale unless there\u2019s a title transfer. The seller would be locked into that contract, and would not hold a note. It\u2019s just a long contract with a payment plan instead of a closing. That means that since there\u2019s no note, a seller can not sell the note on the secondary market, forcing him to service the \u201cloan\u201d that\u2019s not really a loan. ", "replies": [], "depth": 6}], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "edqd3f1", "text": "Can anyone confirm this?", "replies": [{"id": "edqv4qp", "text": "https://en.wikipedia.org/wiki/Seller_financing\n\n&gt;Drawbacks\n\n &gt;   The buyer could pay the loan in full but still not receive title due to other encumbrances not divulged by, or unknown to the seller.\n  &gt;  The buyer could make payments faithfully, but the seller might not make payments on any senior financing that may be in place, thus subjecting the property to foreclosure.\n   &gt; The buyer might not have the protection of a home inspection, mortgage insurance, or an appraisal to ensure that he/she is not paying too much for the property.\n&gt;  The seller might not get the buyer\u2019s full credit or employment picture, which could make foreclosure more likely.\n  &gt;  Depending upon the security instrument that was used, foreclosure could take up to a year.\n  &gt;  The seller could agree to a small down payment from the buyer to assist in the sale, only to have the buyer abandon the property because of the minimal investment that was at stake.\n\nhttps://en.wikipedia.org/wiki/Land_contract\n\n&gt; Consumer-protection concerns\n\n&gt; Because of growing concerns that sales via land contract might violate truth in lending laws, the Consumer Financial Protection Bureau (CFPB) is considering regulating these real estate sales.[3] In 2015, Texas law was changed to automatically place the legal title to the property with the buyer by filing the contract with the deed records office of the county where the property is located. While the seller loses title, the seller retains a vendor's lien in the property for the outstanding balance of the contract.[4] ", "replies": [{"id": "edqv5cd", "text": "**Seller financing**\n\nSeller financing is a loan provided by the seller of a property or business to the purchaser.  When used in the context of residential real estate, it is also called \"bond-for-title\" or \"owner financing.\" Usually, the purchaser will make some sort of down payment to the seller, and then make installment payments (usually on a monthly basis) over a specified time, at an agreed-upon interest rate, until the loan is fully repaid.  In layman's terms, this is when the seller in a transaction offers the buyer a loan rather than the buyer obtaining one from a bank.  To a seller, this is an investment in which the return is guaranteed only by the buyer's credit-worthiness or ability and motivation to pay the mortgage.\n\n***\n\n**Land contract**\n\nA land contract \u2014 often described by other terminology listed below \u2014 is a contract between the buyer and seller of real property in which the seller provides the buyer financing in the purchase, and the buyer repays the resulting loan in installments. Under a land contract, the seller retains the legal title to the property, while permitting the buyer to take possession of it for most purposes other than legal ownership. The sale price is typically paid in periodic installments, often with a balloon payment at the end to make the timelength of payments shorter than in the corresponding fully amortized loan (i.e., a loan without a final balloon payment). When the full purchase price has been paid including any interest, the seller is obligated to convey (to the buyer) legal title to the property.\n\n***\n\n^[ [^PM](https://www.reddit.com/message/compose?to=kittens_from_space) ^| [^Exclude ^me](https://reddit.com/message/compose?to=WikiTextBot&amp;message=Excludeme&amp;subject=Excludeme) ^| [^Exclude ^from ^subreddit](https://np.reddit.com/r/CommercialRealEstate/about/banned) ^| [^FAQ ^/ ^Information](https://np.reddit.com/r/WikiTextBot/wiki/index) ^| [^Source](https://github.com/kittenswolf/WikiTextBot)   ^]\n^Downvote ^to ^remove ^| ^v0.28", "replies": [], "depth": 4}], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "edqcxdj", "text": "I've negotiated a few seller financing situations...from what I've seen sellers may be willing to assume more risk than a traditional lender and also offer more appealing loan terms (usually low interest for a short period, transitioning to higher interest after X months, with a balloon payment after 2-3 years).\n\nWorks out great for a buyer who can't get alternative financing for whatever reason.", "replies": [{"id": "edqd57j", "text": "So it\u2019s basically a bridge Loan with a better rate and terms. ", "replies": [], "depth": 2}], "depth": 1}, {"id": "edrt6lr", "text": "So the seller never has debt on his property when he is doing seller financing?", "replies": [], "depth": 1}]