Nothing Down

Copyright, Bernard Hale Zick
(First right of publication to EMI / MSI)

What to do when the seller needs cash…
and you don't have any.

There are two reasons that a seller will not sell to you for nothing down. The first is that they might think they need the money. The second is that they feel they can not sleep at night if you don't make a down payment.

If you let this stop you from buying for nothing down you have been tricked by the seller…

Continued on ………

…and the seller may be fooling themselves too!

First, let's deal with those that think they need the cash. Do they? Are they going to build a little glass case over in the corner of the living room so they can look at their cash at night? I have actually asked that of a seller. (Ask with a smile.) They will say, "Of course not; that cash will not be here in a week!"

Now we are making progress. What we need to know is what they need to do with the cash. What they need to realize is that they need a solution to a problem, not cash.

One student told me the seller said they were selling to get money to send their son to college in little over a year. The student said, "So what you are saying is that you need the equity out of the house in four payments, the first one starting 14 months from now in August?"

You guessed it! The buyer got terms.

One seller told me they were going to put the money in the bank. I pointed out, that selling this rental house would cause the $100,000 cash they thought they were getting to shrink to$70,000, due to state and federal taxes. And to add insult, they would only get 2% on that money or $1,400 a year. If they took our offer they would get 6% on $100,000 or $6,000 a year. Since he was selling to get retirement income, which one would be better for him?

The point here is that sellers THINK they need cash but they need solutions. If you can get them to tell you the problem they are trying to solve, you can often get the problem solved without writing a check.

Next time we will explore what to do when they do not need cash but need to feel safe in selling to you for nothing down.