Seller Financing Example for $875,000 Sale Price Sale Price: $875,000 Down Payment: Minimum $200,000 (22.86% of $875,000) Loan Amount: $875,000 – $200,000 = $675,000 Terms: Interest-only, amortized over 30 years, due in five years (balloon payment), no points or fees, with the seller matching or beating a verifiable bank/FHA/SBA interest rate. If the buyer is in good standing at the end of the five-year term, the seller will offer an option for an additional five-year extension at the current rate (e.g., 6.5% or the negotiated rate), structured as a new agreement, which may include a further five-year extension option as long as the buyer remains in good standing. Interest Rate: Assuming a buyer provides a verifiable SBA loan offer at 6.5% (typical for commercial properties in 2025), the seller matches this at 6.5%. Annual Interest Payment: $675,000 × 0.065 = $43,875/year Monthly Payment: $43,875 ÷ 12 = $3,656.25 Balloon Payment: After five years, the full principal of $675,000 is due. For reference, a fully amortizing 30-year loan at 6.5% would have a monthly payment of ~$4,264; the interest-only structure saves ~$608/month. Extension Option: If the buyer is in good standing (e.g., timely payments, no defaults), the seller will offer a new five-year agreement at 6.5% (or the negotiated rate), interest-only, due in five years (year 10), with the potential for additional five-year extensions under similar terms while the buyer remains in good standing. Total Payments Over Initial Five Years: Annual: $43,875 × 5 = $219,375 (interest only) Down Payment: $200,000 Total Paid (excluding balloon): $200,000 + $219,375 = $419,375 Remaining Obligation: $675,000 (due in year five, extendable if in good standing) Buyer Benefits: No points or fees (saving ~$13,500–$20,250 vs. SBA loan fees of 2–3%). No appraisal required (saving ~$3,000–$5,000). Interest-only payments reduce monthly costs, ideal for Harrison’s seasonal market. Extension options provide flexibility for long-term ownership without immediate refinancing. Buyer Responsibilities: Buyer covers closing costs and title insurance. Buyer bears costs of any third-party inspectors. Buyer may conduct an inspection but must decide to proceed without forfeiting earnest money within five days of the inspection report. After this period, earnest money is locked in until closing, with no seller contingencies for repairs. The restaurant and condominium has undergone major interior renovations. Featuring all new drywall wall textures flooring lighting countertops all new dining room tables and chairs.