Standard vendor terms

Hi David

Some of the techniques used for Vendor Finance are:
1.  An Instalment Contract
2.  A Second Mortgage Carry-back
3.  A Lease/Option

As you mentioned 20% vendor finance as a deposit, I believe you're considering a Second Mortgage Carry-back (SMCB).  Our last two SMCB's were structured as follows:
a.  20% of the purchase price was carried back by the seller, over 5 years.  We pay $420 per month to the seller and this $420 comes off the amount owed.  We then have a balloon payment for the remainder at the end of the 5 year term.  However, as you will have seen, it's an interest free loan.
b.  20% of the purchase price was carried back by the seller over three years with no payments and no interest over that 3 years.  If we haven't paid it off in three years, we commence payments, over another three years at 5% interest, with the amount owing to be paid off at the end of this second three year period.

As you can see, it boils down to whatever you can negotiate.

Cheers,  Paul