Negotiating Terms....

I remember how Carleton Sheets…says that sometimes he’ll offer to the seller what he/she is asking for…but that he’ll make up for any monetary loss in not getting a discount by negotiating terms that are more favorable to the buyer.

I’m in a similar situation…needing to compensate for about $10,000…but know that the seller won’t budge on the actual sales price…but he may go for different terms.

Could really use some good suggestions here.


what are you trying to accomplish? flip, rehabbers, buy and hold/rental? That will dictate how to negotiate

The person selling the place has only had it for about 5 months…he is doing a short term flip. He bought it at a very low price from an elderly person that listed it at a ridicously low price.

My strategy is to buy and hold for long term rental income.

Because seller has only held for a short term…he’ll get hit pretty hard with taxes…

Thought there might be a mutually beneficial approach…that will save me over the long run.

Thanks for your consideration.


is looks like a great application for the Seller to carry back a sizeable portion of the deal (push for a low rate like 6 or7%). That’s a win-win as he gets payment and interest and the tax benefits of the installment sale aspect and you get interest that you could not get on the open market. If you can get him to carry 20%, then get a loan for the 80% thru a lender, you could be into this property for closing cost (or even no money out of pocket!).

verify how long he has held title, many lenders require 6 months seasoning by most recent owner, if not a year. if you are not requiring a mortgage, it is a moot point, but if you will be getting a loan, this may be an issue.

I spoke with Seller and told him how it would be in our best interest to work out some non-traditional finacing…or a combination of both.

He says he’ll consider owner financing…(a 30 year amortized note…but with the catch that it has to be refinanced in the 5th year…a balloon payment being due).

I can’t see how this 5th year balloon requiring refinancing would be advantageous to myself, the Buyer. It would mean I would have to deal with whatever interest rates are available at that time.

Any more thoughts?



The vast majority of properties on the market at any one time are not a “deal”. The key is to determine what you need to make this an attractive long term hold. If you can get it - great. If not, then move on. In this case it sounds like you already missed the opportunity to buy this property at a big discount. The flipper got that deal. You need to find deals like that!


“compensating” $10k on the sale price is a relative thing. If it are talking about a $500k rental property (i.e. big multi-unit aprtment building) vs. a $100k property (SFR or duplex) is two different worlds. In the end you have to make the numbers work.

As for seller carry, 5 yr. balloon seems to be often quoted. Chance are by then you’ll want to refi or sell it. Many people start out with “I’ll hold it forever”, but probably it 50/50 at best whether you own it in 5 yrs.

aak is on it. I buy my rentals with owner financing involved or buy at 85% or below and my bank will fund based on appraised value. A 5 yr term for a seller second is fair. You should get better terms on that second than with any bank to make it work. Ask for no interest on it. Why? Cause you never know they might say yes. I know this cause I just did this on a 3 unit. Seller carried back 15% at ZERO interest and 150 bucks flat a month on a two year note. Should have seen the realtor and bank drop their jaws. Priceless.


I’m sorry I must have missed the reason you want this property. Are you sure there’s a deal here? Sounds like you’ve solved the financing issue, but is this a property worth buying? Let’s say the seller is willing to take a zero down interest free first mortgage. Why are you buying the property?