Real Estate Rookie – Never Do a Seller Financing Deal Like This… (Rookie Reply)

Podcast: Real Estate Rookie
Hosts: Ashley Kehr & Tony J. Robinson (BiggerPockets)
Date: November 7, 2025

Episode Overview

This episode tackles three critical, practical questions new real estate investors face, centered around selling difficulties, the risks in creative financing (specifically seller financing and subject-to deals), and the perennial debate over providing appliances in rentals. Ashley and Tony provide context from today’s market, share personal experiences, dissect real-world scenarios from BiggerPockets forums, and debate different landlord strategies, all in their signature encouraging and candid style.

Main Discussion Points & Insights

1. When a Buyer Defaults or Delays on Closing

[00:22–07:11]
A listener ("Michael") asks whether to enforce a contract and relist a property or give a non-performing buyer more time, given a small deposit and prolonged delays.

Key Considerations:

• Market Conditions & Seasonality
  • Ashley notes that today’s slower market (especially in winter in places like Buffalo, NY) might favor granting extensions; immediate relisting could result in a longer vacancy.
  • “If you would have asked me, you know, two years ago, I’d say move on to the next buyer … but you might not find that other buyer right away.” – Ashley Kerr [02:04]
• Seller Motivation
  • Tony stresses understanding your personal urgency—if a hard-money loan is due, you may need to act faster than if you’re just “testing the market.”
  • “What is your motivation for selling here and how much pressure do you have to actually disposition this asset?” – Tony J. Robinson [03:20]
• Likelihood of Closing & Contractual Leverage
  • Assess why the buyer is delayed. Have the financing problems been solved? Is the issue transparency or solvable?
  • Both recommend requiring a substantially increased non-refundable deposit for any further extension, as a litmus test of buyer commitment.

Memorable Quote:
“It’s got that stain on it, right? There’s a stigma around properties that have been relisted.” – Tony J. Robinson [05:32]

2. Seller Finance & Subject-To Horror Story

[09:22–20:03]
A listener shares a nightmare: after selling with seller financing (actually a contract for deed/sub-to), the buyer stops paying, illegally Airbnbs the property, damages it, then squats in the basement, while the seller struggles with legal recourse and unintended tenants.

Breakdown & Lessons:

• Seller Financing vs. Subject-To Defined
  • Seller Financing: Owner owns free and clear, finances buyer directly.
  • Subject-To: Buyer takes over payments on existing mortgage, but original owner’s name & responsibility stay with lender.
  • “Subject to is when same property, but I’ve got a mortgage on it and I’m going to let Ashley buy it subject to the existing mortgage ... My name’s, everything that I did still stays in place. But now Ashley is making those payments on my behalf.” – Tony J. Robinson [12:34]
• Legal & Practical Nightmares
  • Seller is stuck: legal costs, contract ambiguity, confusion over eviction/ownership rights, property damage, and “squatters with paperwork.”
  • Difficulty in recovering money or regaining control if title has transferred or lease agreements have been made by non-owners.
• Limited Solutions
  • Only viable options: retain strong legal counsel and/or negotiate “cash for keys” (pay off squatters to leave).
  • “I don’t even know if I could do anything else or offer any advice above and beyond that because it’s like what legal standing do you have?” – Tony J. Robinson [15:07]
  • Selling subject-to means sellers can be left holding the bag — credit on the hook, no effective control.

Notable Moments:

• The hosts speculate that offloading properties “sub 2” (subject-to) is riskier for sellers than often discussed, especially if the buyers have no “skin in the game.”
• “When you talk about skin in the game, they’ve essentially got none. And unless they’re just a person of high integrity—which it seems like these people are not—it becomes a lot easier for them to walk away and put the sellers in a pretty sticky situation.” – Tony J. Robinson [18:33]
• Sellers considering creative financing must ensure iron-clad contracts, understand their risks, and ideally consult specialists (e.g., Pace Morby for sub 2).

3. Appliances in Rentals: Supply or Require Tenants?

[23:37–33:38]
A listener ("Grant") asks: should a landlord provide a washer/dryer in a unit that typically has them, or let tenants buy/install their own?

Points Debated:

• Check Local Comparables First
  • If other units at target rent have appliances, not providing them may make your unit “non-comparable” and harder to rent.
  • “If you ran your numbers based on other properties in the area getting $1,200 per month, is that based on them having appliances included?... it’s going to be way harder to fill that unit.” – Ashley Kerr [25:30]
• Ongoing Maintenance Hassles
  • In rural areas with few reliable vendors, the cost and hassle of repairs may outweigh the benefits.
  • Some landlords provide appliances but with a lease clause stating tenants are responsible for maintenance.
  • “I usually don’t like warranties because they don’t seem to care as much as like getting things done in a timely manner…” – Ashley Kerr [27:10]
• Partial Inclusions & Liability
  • Built-in appliances (like dishwashers) are usually included. Gas hookups require professional installation to avoid liability.
• Anecdotes on Amenities
  • Tony shares a story of a rental where closet rods and mirrors were “upsells”:
    “The agent who was showing them the place said, ‘Oh, if you want [closet rods], it’ll be extra on your rent.’ Oh my god, I never heard that in my life.” – Tony J. Robinson [31:26]
  • Ashley recalls a complex where the washer/dryer closet was padlocked unless tenants paid extra.

Memorable Quotes (with Timestamps & Attribution)

• “If you would have asked me, you know, two years ago, I’d say move on to the next buyer … but you might not find that other buyer right away.”
  — Ashley Kerr [02:04]

• “What is your motivation for selling here and how much pressure do you have to actually disposition this asset?”
  — Tony J. Robinson [03:20]

• “It’s got that stain on it, right? There’s a stigma around properties that have been relisted.”
  — Tony J. Robinson [05:32]

• “Subject to is when… I’ve got a mortgage on it and I’m going to let Ashley buy it subject to the existing mortgage ... My name’s, everything that I did still stays in place. But now Ashley is making those payments on my behalf.”
  — Tony J. Robinson [12:34]

• “When you talk about skin in the game, they’ve essentially got none. And unless they’re just a person of high integrity—which it seems like these people are not—it becomes, I think, a lot easier for them to walk away…”
  — Tony J. Robinson [18:33]

• “If you ran your numbers based on other properties in the area getting $1,200 per month, is that based on them having appliances included?... it’s going to be way harder to fill that unit.”
  — Ashley Kerr [25:30]

• “The agent who was showing them the place said, ‘Oh, if you want [closet rods], it’ll be extra on your rent.’ Oh my god, I never heard that in my life.”
  — Tony J. Robinson [31:26]

Timestamps for Key Segments

• [00:22] – Introducing question about buyer default after extension
• [02:04] – Discussion of market conditions, motivation
• [05:32] – The stigma of relisted properties
• [09:22] – Seller finance/sub-to horror story and legal mess
• [12:34] – Ashley and Tony explain seller financing vs. subject-to
• [15:07] – Legal recourse frustrations
• [18:33] – Risks of sub-to for sellers
• [23:37] – Question about including appliances in rentals
• [25:30] – Ashley’s perspective on comparables and maintenance
• [31:26] – Tony’s anecdote about landlords upselling closet rods
• [33:33] – Ashley and Tony riff on odd amenity upcharges

Summary Flow & Tone

Ashley and Tony stay pragmatic, friendly, and a little irreverent, providing both strategic frameworks and cautionary tales. They do not shy away from admitting where solutions are murky (“not a whole heck of a lot we can do”), and frequently reinforce the importance of context—local market, motivation, risk tolerance, and contract specifics.

Takeaways for Real Estate Rookies

1. Selling? Weigh both market realities and your own urgency before cutting off a shaky buyer; but always secure a meaningful deposit for extensions.
2. Creative financing is not without real risk for sellers—rock-solid contracts, legal support, and full understanding of consequences (especially with subject-to) are essential.
3. To provide appliances or not? Let local norms, your operational bandwidth, and maintenance realities dictate the decision, and be clear in your lease about what is and isn’t included.
4. Always look for “skin in the game” from buyers or tenants in any transaction—commitment reduces risk.

For more rookie stories, insights, and relatable Q&A, subscribe to Real Estate Rookie or join the BiggerPockets community.