Discover how seller carry-back financing offers a flexible path to homeownership, benefiting buyers and sellers with negotiated terms.
A "seller carryback," also known as seller financing or owner financing, is a real estate financing arrangement in which the seller of the property acts as the lender to the buyer. Instead of the buyer obtaining a loan from a traditional financial institution, the seller extends credit to cover part of or the entire purchase price of the property, minus any down payment. This arrangement typically involves a promissory note that specifies the loan's interest rate, repayment schedule, and consequences of default.
Seller carry back financing is a unique and flexible option for financing real estate transactions, offering benefits for both buyers and sellers. However, careful consideration and negotiation are required to ensure the terms are beneficial and protect both parties' interests.
In the event of a default, the seller, like a traditional lender, may have the right to foreclose on the property to recover the investment.
Yes, buyers can refinance a seller carry back loan with a traditional mortgage, assuming they qualify for refinancing based on their creditworthiness and the property's value.
While seller financing can be used for a wide range of property types, individual sellers may have preferences or restrictions based on their circumstances, and some jurisdictions may have specific regulations affecting seller-financed sales.
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