Why You Should Offer Seller Financing on Day One, Not After Your Land Sits

Here is the pattern I see every week. A land investor lists a parcel for cash. It sits. They drop the price. It sits some more. Months later they add "owner will finance" and it finally sells. The financing was the answer all along, it just showed up late, after the carrying costs and the price cuts. This post is about putting terms in the first listing, and how to do it without waiting years to get paid.

Why should you offer seller financing from day one?

Because most vacant land buyers cannot get a bank loan, a cash-only listing shuts most of them out from the start.

There are no Fannie Mae, FHA, or VA programs for raw land, and most community banks and credit unions will not lend on unimproved acreage either. That leaves most land buyers needing all cash or owner financing. If your first listing is cash only, you are marketing to the smallest slice of the buyer pool, then waiting to find out what you already knew.

What does waiting to offer terms cost you?

Every month a cash-only listing sits costs you carrying costs, and the price cuts along the way usually cost more.

One example from our sell-at-closing guide: 10 acres listed for cash at $60,000 sat for 4 months with no offers. Relisted at $75,000 with seller financing, it sold in 2 weeks. With 20% down ($15,000) and the $60,000 note sold to us at 80%, the investor netted $63,000 at closing. That is more than the cash asking price, and the four months of waiting came first. See how selling your note at closing works for more examples.

Do you have to wait years to get paid if you offer terms?

No. You can sell the note at closing and collect 84 to 92% of the sale price in cash that day.

This is the objection that keeps sellers on cash-only listings. With a simultaneous close, your buyer signs the note and deed of trust, and we buy the note from you at the same closing. We pay 80 to 90% of the note balance. With 20% down, that puts 84 to 92% of the sale price in your pocket at closing. The buyer still gets their financing and makes payments to us instead of you.

How do you set up the listing on day one?

Get a note pre-approval before you list, then advertise the terms in the listing itself.

1. Get pre-approved. Send us the property details and expected price before you list. Within 24 to 48 hours we tell you the maximum note we will buy, the terms we accept, and what we pay as a percentage of the note.
2. Put the terms in the headline. "Owner Financing Available" or "Seller Will Finance" belongs in the title of the listing, not buried in the description.
3. Price for terms. Financed buyers focus on the down payment and the monthly payment, which is why terms and a full price go together.
4. Add the assignment clause. Your purchase agreement should say the seller may assign the promissory note and deed of trust to a third party at or after closing.

What terms make the note easy to sell?

At least 20% down, 9 to 12% interest, a 5 to 10 year term, a note plus deed of trust, and a professional servicer.

We do not buy land contracts, so set the deal up as a note and deed of trust from the start. Why to avoid land contracts explains the difference.

Is seller financing on day one right for every parcel?

No. Small parcels and properties you would not want back are better sold for cash.

Below about $25,000, I recommend cash only, because a buyer who needs terms on a parcel that cheap often cannot afford it, and you end up taking it back. We also pass on notes where the property has no legal access or sits in wetlands or a flood zone, because those are the properties that are hardest to take back and resell. If the parcel fits, offer terms on day one. If it does not, price it for cash and move on.