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Does 0% interest on Seller Financing sound 'Interesting'?

By
Real Estate Agent with Realty World - Heritage Realty

0 % Financing is a new concept we are trying in the Katua Community in Maggie Valley, NC. It is a resort sales area so we are attempting to grab the interest of people that do not 'need to buy' but may want to get a good investment with great terms and while prices are very competitive.

Has anyone tried 0% financing to promote properties? The CPA said the tax consequences include that the amount of a 'normal interest rate' would be deducted from the sales price and categorized as interest earned on the tax return. That is not too big of a negetive.

Any other ideas, suggestions & comments on how this might be marketed or any pit falls in your experience.

See Katua www.MountainHeritage.com

Brian Griffis
Realty Choice - Springfield, MO

Any competent person knows an individual can't rent money for nothing, so how does the plan work?  Is the price of the house raised to compensate for no interest?  If so, the monthly payment would effectively be the same I assume?  Interesting concept, but I think it is better just to be honest with people.  Money rent is NOT free in a capatalistic society, so it has to be coming from somewhere.  Why not just lower the price of the properties accordingly? In America, as in Germany, people are more price conscious than interest rate conscious.  Most would rather see a lower overall price than a gimmick interest rate, especially after all the problems people have seen with exploding arms, people would tend to be weary I think.  It would be interesting to learn more about the program.     

Jan 31, 2009 08:10 AM