What Is Seller Financing?
Seller Financing (sometimes called “Owner Financing”) is when you act like the bank. Instead of me paying off your mortgage all at once with cash, you agree to accept payments over time — with interest.
Here’s how it works:
- You sell the property to me (or my company).
- Instead of a traditional bank loan, I sign a Promissory Note and Mortgage/Deed of Trust in your favor.
- You collect monthly payments (often with interest), just like a bank would.
This option is especially useful if:
- You want to get your full asking price without waiting for a retail buyer.
- You don’t need all the cash up front and would prefer steady income.
- You own your home free-and-clear (or have a lot of equity).
- You want possible tax benefits by spreading payments over several years instead of taking everything at once.
Why Do Sellers Choose Seller Financing?
- Keep your price — no need for a discount.
- Monthly income — steady payments you can count on.
- Interest earnings — in many cases, more than you’d earn at the bank.
- Fewer taxes up front — potential tax advantages (consult your CPA).
- No repairs or commissions — we buy as-is and cover closing costs.
How the Seller Financing Process Works
1. Tell us about your property
Quick call or form — we review your situation, mortgage status, and selling goals.
2. Walk-through & review
I visit the home (or do a virtual tour) to check condition and confirm terms.
3. We agree on terms together
- Down payment (often 5–20%)
- Monthly payment
- Interest rate
- Length of loan (term)
4. Secure documents at closing
A licensed title company prepares:
- Promissory Note (details of the loan)
- Mortgage or Deed of Trust (recorded with the county to protect you)
5. You collect monthly income
Payments are sent via a licensed loan servicing company for safety and record-keeping.
What If the Buyer Stops Paying?
This is a common concern — and here’s how you’re protected:
- You hold a recorded lien (just like a bank).
- If payments stop, you have the right to foreclose and take the property back.
- We can also structure performance clauses to give you even more peace of mind.
- Payments are made through licensed servicing, so you always see proof.
Common Questions About Seller Financing
Do I have to own the home free and clear?
Not always. Seller financing works best when you don’t have a mortgage, but sometimes it can be combined with other structures (like a wrap-around mortgage).
How much down payment will I get?
That depends on our agreement — typically 5–20%. We’ll tailor it to what makes sense for both sides.
What kind of interest can I earn?
Anywhere from 3% to 8% is common, depending on the deal. That’s usually much more than you’d get leaving the money in a savings account.
Is this legal and safe?
Absolutely. Everything is done through a licensed title company and recorded with the county. You’re fully protected as the lender.
What if I want the payments to stop early?
We can agree on a “balloon payment” — meaning after a few years, I refinance or pay the balance in full.
Benefits of Seller Financing
- You sell quickly without waiting for a retail buyer.
- You get your asking price without a discount.
- You turn your equity into a steady monthly income stream.
- You may save on taxes by spreading the income over years.
- You’re protected by a recorded lien and servicing company.
Ready to Explore Seller Financing?
If you’d like to learn how Seller Financing could work for you, let’s talk. I’ll personally walk you through the numbers, show you exactly how the documents protect you, and help you decide if this is the right path.
Contact me today to schedule a quick call or property review.