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Who Qualifies for Vendor Finance?

Updated: Feb 29

Three weeks ago, I shared a video on “How Property Vendor Financing Works”, so let me sum this up again before I explain if you qualify for Vendor Finance.

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What is Vendor Finance?

Property Vendor Finance can help an owner sell their property quickly and for the right price, while offering buyers an alternate way into home ownership.

Vendor finance allows buyers to purchase a property when they do not qualify for a traditional bank home loan. This type of vendor finance arrangement involves a loan or mortgage contract between the owner and the buyer. Essentially, the owner must still meet any home loan obligations they have while the buyer pays them in weekly or monthly mortgage instalments.

The buyer pays a premium interest rate which creates profit for the seller.

Typically, the property title remains with the seller until the buyer pays the final instalment or refinances the property. The contract duration is usually 25 to 30 years but most buyers refinance within 2 to 5 years.

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Why do sellers find Vendor Finance attractive?

In this climate where it is harder to get bank loans, Sellers can benefit in two ways by offering a vendor finance option to buyers:

  • Properties sell faster because they appeal to more buyers. Offering an option to pay that appeals to low income earners or self employed expands your pool of buyers. This makes it more likely that you will find a buyer sooner.

  • The owner can sell for a higher price. Rather than discounting to encourage offers, you can offer payment terms that suit the needs of the buyer.

  • It’s especially beneficial to sellers in a buyer´s market that is flooded with similar properties because it provides opportunity to buyers that are excluded from traditional home financing, differentiating your property from others..

How to qualify for Vendor Finance?

Vendor finance is aimed at buyers with low income or self-employed workers or those with a bad credit history. Buyers should be in a good position to take on a loan and should have a good reason for any bad credit history.

Owners should always do due diligence to qualify the buyer. They must satisfy the following criteria to qualify:

  1. The buyer must seek legal advice before purchasing a property using Vendor Finance.

  2. Buyers need a minimum of 2% of the purchase price for the deposit.

  3. On the buyer’s current income, they must be able to afford the repayments of the loan.

Is Vendor Finance legal?

Vendor financing is allowed in Queensland, New South Wales, Western Australia, Northern Territory and ACT.

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Vendor Financing to build Positive Cash Flow. Download this eBook now on

Download my FREE eBook to discover:

  • The top 3 things you need to be successful -- and how much experience you'll need

  • The type of person who gets the best results with this cash flow strategy

  • How much you can expect to make per month, and the concept of the "big pay day"

  • What part of the property market offers you the best opportunity for positive cash flow deals -- know the type of home you'll be looking for

  • Where in Australia you can use this positive cash flow strategy

  • Why this strategy outweighs doing it hard for the tax benefits of negative geared property (which only makes you more of a slave to a job you might not even like)

  • The best way to get started -- and how long it really takes to be good at this strategy

  • Do you need a buyer first, or a house? It's answered here!

  • The surprising strategy for fast tracking your success in a property deal

  • Common problems you're likely to encounter

  • How to benefit from the banks tightening home loans and financing requirements (and why you'll be seen as a "super hero" -- it's a "win-win" against the banks!

To Your Success Paul Zalitis The Aussie Wrapper


About Paul Zalitis, the Aussie Wrapper

What I’ve been doing is helping mates create positive cash flow and helping them achieve their dreams of owning property and building their finances through Property Vendor Financing.

Subscribe to our YouTube channel to learn more about Property Vendor Financing -


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