Vendor Finanace $25,000 on 320,000 Sale

We have a buyer for a unit up for sale. Sale price is $315,000, buyer is very keen ...she has $300,000 cash and needs to borrow $25,000 to finalise. She has no job and CBA have knocked her back. NAB are looking at it. :rolleyes:

I know that sounds a bit suss .. with 93% equity why would they knock her back. :eek:

IF .. after checking the nuts and bolts it looks ok, we may consider vendor finance of the last $25,000.

Where do I find out info about how to .. etc?
Any ideas?
Opinions? ... good and bad.
 
IF .. after checking the nuts and bolts it looks ok, we may consider vendor finance of the last $25,000.
Where do I find out info about how to .. etc?
Any ideas?
Opinions? ... good and bad.

Do a search on "vendor finance" - plenty of posts Novar (long time no see btw);)
 
Hi there, still reading here occassionally not posting as much.

I did a quick search and will do a better search tonight when I have more time.

Thanks
 
the bank knows something you dont thats for sure...get a credit history done and quick just in case...

good buyer to have but you would need to ensure security over the property without question until the debt is paid
 
the bank knows something you dont thats for sure...get a credit history done and quick just in case...

good buyer to have but you would need to ensure security over the property without question until the debt is paid

Not having a job is one of those factors lenders tend to frown upon.

We're picky like that ;)
 
yep i understand about the job issue but 25k is an easy pay for anyone even on the dole id suspect...

the risk surely is quite low in this case if they have such a large portion of the outlay.

its well and truely in any banks favour...i think there must be more to it than not having a job in this case...

my best mates son was just offered 350k by the CBA for a housing loan yesterday, he has 10k in the bank, a car loan worth 30k and a 1000 dollar a week job gross.........id say hes well and truely a way higher risk of defaulting on a housing loan than someone on the dole but only borrowing a small amount..

banks, brokers, lenders..i dislike the lot of 'em anyway... :)
 
We're selling it Nathan.
Sure doesn't add up ...has the estate agents beat as well. I am friends with the agency selling so how it's legit and none of us can figure out why.

She is trying at NAB if that fails a mortgage broker. If all fails we will look at it BUT with a fine tooth comb.

Looking at the figures 25,000 @ 5.6% can be paid within 3 years.

From what I've searched (a little bit) usually the seller has the largest financial stake and the property stays in their name until the loan is paid out. This is different with the buyer having the majority stake.

Luckily I have access to a legal opinion with not too much trouble so will run it by someone but unfortunately not till late next week.

Thanks again
Anyone else want to chime in
 
I see no problem with vendor finance for 25K.
The max you can lose is 25K, most likely any problem will be after a couple yrs
and I assume you'll have a mortgage on the house anyway.
Only problem imo is 5.6%,
25K @ 10%
is a little closer to the mark.

Token F, just because they have no job doe'snt mean they have any money.
As a seller it's a concern where or how they get their money.
 
Thanks
The unit price was 325,000 originally, reduced to $319,500. We accepted at $315,000 just to move on before the FHO Grant dies. We've signed a contract today with finance clause.

Not mentioned the vendor finance yet till we see how she goes at the banks .. real estate seller/friend knows but keeping in back pocket. I ran it past her to see if she knew anything or had thoughts.

If it all checks out ...she is a good prospect etc. The terms will be negotiated not sure how yet, maybe price will return to $319,000 and rest fixed at 7 or 8 %.

Dunno ... happy for ideas. I am not out to rort but not charity or desperate either.
 
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From what I've searched (a little bit) usually the seller has the largest financial stake and the property stays in their name until the loan is paid out. This is different with the buyer having the majority stake.

I think you'll find that the title deeds get transfered to the incoming lender of the purchaser. As a provider of $25K finance on whatever terms you agree with the purchaser, you get to either register a second mortgage or a caveat on the property (cheaper). But it is sold and you will only be another source of finance (creditor).
 
I think you'll find that the title deeds get transfered to the incoming lender of the purchaser. As a provider of $25K finance on whatever terms you agree with the purchaser, you get to either register a second mortgage or a caveat on the property (cheaper). But it is sold and you will only be another source of finance (creditor).

I think you will be able to take out a first mortgage on this property as you will be the only entity providing finance if I have read the previous posts correctly.
Boods
 
if they want vendor finance get them to pay you $35k so up sale price by $10k.

get 10% interest.

And make the principal to be paid back within 5 years.

This will ensure you have income of $200 pw for 5 years :)
 
Thought of something else. Will run by the account first but wondering now.

Is payments made on a loan such as vendor finance considered income? I presume so, so half of any payments would go to the tax dept ... :eek:
Have to work it out good if it does!!
 
Thought of something else. Will run by the account first but wondering now.
Is payments made on a loan such as vendor finance considered income? I presume so, so half of any payments would go to the tax dept ... :eek:
Have to work it out good if it does!!

No. no. Only the interest component is considered income.:p
 
This sounds like a sweet deal to me!:p

How lucky the buyer is that you are open to Vendor Finance!

I wonder why this person has 300k sitting around and wants to invest it SO SO urgently.

Could be that I have just finished a course on Money Laundering that I am a wee bit suspicious?:rolleyes:

In any case, suspicions aside I would take the deal. Cashflow is what am I after at present.

Regards JO
 
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