Seller Financing Defined.

Seller financing (also known as an owner carryback, a land contract, or a private party mortgage), is when the seller allows the buyer to purchase property over time. Instead of receiving a lump sum of cash at the time of sale for the note, the seller receives principal and interest payments directly from the buyer.

Seller-finance sellers and buyers typically look to Realtors and Title and Escrow Professionals to connect them to a contract servicing solution, to relieve the burden of managing the real estate contract they have created.

For your clients, seller financing offers the following advantages:
	Sellers can transform equity into a monthly income stream, typically earning 8-11% interest.
	Because the loan is for real property, seller financing is a low-risk investment option for seniors and other sellers.
	It’s easier to sell non-standard property, such as undeveloped land, when alternative financing is offered.
	Terms are set by the seller and the buyer, giving both greater flexibility.
	Due to the detailed records we keep, sellers who have their notes serviced are able to sell their note for more if they ever decide to get cash for their note.
	Unlike a cash sale, seller financing often keeps a seller from being pushed into a higher tax bracket.
	If a buyer’s credit is less than perfect, but they’re still capable of making a regular mortgage payment, a seller is often willing to finance the sale directly.
	Paying regularly on a seller financed loan is a significant way for a buyer to establish credit.