Vendor financing - interest rate?

From: GoAnna !

I am currently negotiating a deal which has a delayed payment. I may have to have to pay some interest on this vendor financing to close the deal. Has any one had experience in this and what level of interest is usually considered fair? The same as market rates? Higher? Lower?

GoAnna !
(aka Anna before she got real)
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Reply: 1
From: Michael Yardney

Vendor's usually charge above market rates, figuring that if you could get finance from the banks you would. In other words they usually realise that you need their finance and therefore they are the ones controlling the negotiations and setting the rates.
You could try and twist things around and show them how by helping you with finance they are achieving their goals of selling the property at a good price, but in today's hot market this is not a very strong argument.
Good luck with your negotiations
Michael Yardney
Metropole Properties
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