Real Estate Contract: "Raise the Price, Lower the Terms"

Seller financing has already become a convention for real estate transactions in the decade of the 80's on.

Currently nearly two-thirds of all home sales involve contract sales or assumptions with owner carry-back second mortgages.

Tight money conditions always foster seller financing of this type.

Yet even though the concept of "seller as lender" is no longer foreign to the American way of real real estate property transfer, there are variations to the game that give creative real estate investors the advantage over the competition.

One such variation is the important technique called "Raise the Price and Lower the Terms."

Simply put, this calls for the real estate investor to offer the seller more than he is asking for the real estate property in exchange for flexibility with the terms.

For example, one investor we know of recently took an interest in a Jacksonville, Florida, estate house with adjoining triplex.

He offered to raise the sales price by $8,000 if the seller would lower the down payment requirement and accept payments over 10 years.

By using this technique, he out aced the competition and won over the seller despite the hue and cry of all the relatives in the background.