Before we get into the details of our Application & Qualification Pack Bundle, I’d like to clear up some confusion regarding Deposits and Vendor Finance Management. We recently heard someone wasn’t going to use VFM’s service because they didn’t want to pay 4.4% of the Deposit they were about to receive for a property.
Are Deposits Being Skimmed?
Nexus doesn’t usually collect Deposits, i.e. buyers normally pay the deposit directly to you, the vendor financier. However, even if Nexus did collect the Deposit, we’ve always had a policy of not charging any fees for the collection of a Deposit.
I checked with Lisa, from Paid Pty Ltd, and she’s also keen to clear up any confusion, i.e. she has the same policy as Nexus. Either way, you can rest assured the Deposit gets to you untouched
But The Owner Wants Their Money In …….
I was talking with a vendor financier a few days ago and it was mentioned they were only doing a 3-year Deposit Builder because the seller wanted out of the transaction in 3 years.
Call us crazy 😉 but we won’t enter into a transaction with a seller these days unless they’re prepared to stay in the deal for a minimum of 5 years. I could give you a lot of numbers but our experience is that, in areas of low capital gain, it takes on average 5 years for our buyers to get into a position to refinance.
Sure there are capital gain hot spots but getting our sellers into a 5 year frame of mind, sure helps ‘expectation management’ and saves you a lot of heartache in the future. That is, when your sellers are complaining to you that you said they’d be out in 3 years and your buyers just aren’t ready for a refinance.
While finding sellers is reasonably difficult when you first start your vendor finance business, remember ‘you have the cookie’ that helps overcome your sellers’ problems. So ‘position’ your offer to the seller with confidence and authority and don’t let your seller take control of the ‘cookie’.