Creative Financing

Another advantage that the prospective buyer should toss into the negotiating picture is the possibility of creative financing. For example, the seller may be willing to hold a second mortgage; this can reduce or eliminate the need for a down payment. The seller also may more readily agree to take responsibility for closing costs. For a typical $100,000 purchase, closing costs can range from $900 to $5,000, depending on the financing and purchase situation. The FSBO purchase transaction may also provide the buyer with an opportunity to exercise an assumption option, which has many little-known benefits for the buyer, including savings of thousands of dollars in interest payments and possible reduced down payments.