Thanks again to those returning to our series on how realtors can be more successful selling commercial real estate. On Monday we addressed The Financing Package as a way to connect with qualified buyers. Once the connection is made, there are several things a realtor can do to maximize the value of the property and facilitate quality offers. One of these things, and the second topic of our series, is: The VTB Conversation.
With lenders asking for 25%-35% down payment on an investment property, it is very common for vendors to help finance the property for new owners by offering a VTB (vendor take back mortgage). I am surprised when some realtors tell me their client would never do that. Well, did you actually ask the question? Did you explain how it may work to their advantage? Properties that sell with VTB financing sell at a premium, as buyers who require this assistance are willing to pay more to gain the co-operation of the seller, since the ability to finance is more important than the eventual purchase price.
VTB financing becomes a double win for sellers when there is no immediate need for the funds they earn from the transaction, because the mortgage rate charged will likely be higher than the rate of an investment made elsewhere.
A VTB can be a win/win for both parties under the correct circumstances, so understand what is possible, and use that information to help you market the property.
Questions, suggestions? Join us on twitter: @BruceSmithLive #BrokerThoughts
On Friday we will end this series with The Role of the Realtor.
We welcome your comments.
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