What is Seller Financing?Complete Guide for Property Owners
Discover how seller financing works, why it's becoming increasingly popular, and how to maximize the value of your seller financed note with advanced solutions.
Discover how seller financing works, why it's becoming increasingly popular, and how to maximize the value of your seller financed note with advanced solutions.
Seller financing, also known as owner financing or seller carry-back, is a real estate transaction where the property seller acts as the bank, providing financing directly to the buyer. Instead of the buyer obtaining a traditional mortgage from a bank, the seller extends credit to the buyer and receives monthly payments over an agreed period.
When you provide seller financing, you create a seller financed note - a valuable asset that generates monthly income or can be sold to investors like Note Buyers of America for immediate cash.
Sarah owns a $300,000 house and wants to sell quickly. Instead of waiting for a buyer with perfect credit, she offers seller financing: $50,000 down payment, then $2,100/month for 15 years at 7% interest. The buyer gets the house immediately, and Sarah gets steady monthly income plus the ability to sell her seller financed note for a lump sum if needed.
The seller financing process involves several key steps that create a mutually beneficial arrangement for both buyer and seller:
Buyer and seller agree on purchase price, down payment, interest rate, monthly payment, and loan duration.
Execute promissory note, deed of trust or mortgage, and closing documents that protect both parties.
Buyer makes monthly payments directly to seller, building equity while seller receives steady income.
When note is paid off, seller transfers clear title to buyer. Or seller can sell the note for immediate cash.
The biggest advantage of seller financing? You can sell your seller financed note to companies like Note Buyers of America and receive a lump sum of cash instead of waiting years for monthly payments.
Seller provides 100% of the financing. Buyer makes down payment and monthly payments directly to seller until the seller financed note is paid off.
Best for: Buyers with poor credit, unique properties, quick sales
Buyer gets a traditional mortgage for part of the purchase price, and seller finances the remaining amount. Creates a smaller seller financed note.
Best for: Bridging financing gaps, competitive offers
Buyer makes monthly payments but doesn't receive deed until final payment. Seller retains ownership during the payment period.
Best for: Buyers building credit, rent-to-own situations
If you've created a seller financed note and want immediate cash instead of waiting for monthly payments, Note Buyers of America can help with advanced valuations and 24-hour offers.
Yes, seller financing is completely legal in all 50 states. However, regulations vary by state. Texas, Florida, and California have specific disclosure requirements for seller financing transactions.
Interest rates for seller financing typically range from 6-12%, depending on current market rates, buyer's credit, and property type. Our advanced analysis can help determine optimal rates for your situation.
Yes! You can sell your seller financed note to investors like NBOA immediately after closing or anytime during the payment period. This converts your future payments into immediate cash.
If you still own the note, you can foreclose and regain the property. If you've sold the note to an investor, the buyer handles default situations. This is one reason many sellers prefer to sell their notes.
Turn your monthly payment stream into immediate cash with America's most advanced note buying process