Seller FinancingPotential home buyers appreciate every bit of financial help they can find. When this comes in the form of seller financing, they have a unique opportunity to work directly with the home owner.

Usually, this occurs when the seller does not have the credit standing for a bank loan. If for whatever reason they are unable to acquire financing through a local bank or credit union, the seller may opt to loan them this money instead.

Why would a seller be willing to do this?

By lending a buyer the money to make the house purchase, they are going to increase the number of payments to themselves over time. That means their family will benefit from the sale of their house for many years and the buyer gets a home they love.

So how does this work?

Promissory Note

One method of using seller financing involves a promissory note and the deed of trust. The buyer signs both of these documents and agrees to let the seller foreclose on the property if payments are not made. Once these agreements are completed, the owner transfers the deed to the home buyer.

From this point, the home buyer can proceed in exactly the same way as if they had purchased the real estate from a bank. If they choose to sell the property or refinance their loan, they have all the rights to do so.


Another way to use seller financing is to use a rent-to-own contract. In a case like this, the home buyer is not given the title to the property until the seller has received the full balance of the loan. Once the agreed purchase amount has been paid in rent payments, the seller will transfer the deed to the home buyer’s name.

If you do choose to use this method to purchase a home for your family, remember that you’re not allowed to refinance or sell the location to anyone else. Technically, it’s not yours until you finish making the last payment to the homeowner.

Both of these are excellent solutions to use selling financing and they can help you obtain real estate in your own name. Rather than wait several more years or try to work with high interest rates, find out if this is an option for you. It helps the seller move into their location much sooner and helps your family get established in a place of your own.

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This is filed under Home Buying.

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