What is seller financing?

Seller financing refers to a situation where the seller of a property acts as the lender for the buyer, rather than the buyer obtaining a traditional mortgage from a bank or other financial institution. In this arrangement, the seller provides financing to the buyer, allowing them to make payments directly to the seller over an agreed-upon term. This can be advantageous for both parties; the buyer may have access to financing that they might not qualify for otherwise, while the seller may benefit from a quicker sale and potentially a higher sales price.

This method can also facilitate a smoother transaction, as it reduces the level of involvement from traditional banks and can expedite the closing process. By bypassing conventional financing routes, seller financing can create more flexible payment options and terms, which can be tailored to meet the needs of both the buyer and the seller. This aligns closely with the concepts of creative financing strategies often discussed in real estate transactions.