Seller Financing

As long as a property owner does not have lean holder on their property then they have the option of Carrying financing with the sale of the property


If a seller is going to carry financing on a property the sale of the Real Estate still proceeds in the same manner, as an any other real estate purchase.  At closing a deed is recorded and the new property owner becomes the legal owner of the property.  The seller of the property will retain a deed of trust, the same way a bank would, and the new owner makes payments with interest just the same as if they had financed with a conventional lender.

Advantages of seller financing
The nice thing about a carry back is that the buyer and seller can negotiate the terms of the loan, without any of the conditions that come with conventional financing.  Carry backs are generally simple to execute, so a sale can be completed very quickly, much like a cash sale.  Sellers are often worried about the inconvenience of a carry back, but the inconvenience is minimal thanks to the loan servicing company.  For a minimal fee the servicing company will handle all aspects of the carry back, they collect the payments and send them to the seller.  A buyer can even login in to the web site to check their account or make online payments.

Seller advantages
The biggest incentive to a seller in a carry back is that they collect the interest over the course of the loan.  Another advantage to a carry back is from a tax point of view.   A carry back splits up the lump sum of money that comes with the sale of a property, allowing the tax burden to be split up over several years, or maybe just postponed for a while.

Buyer advantages
A carry back can also be desirable to a buyer in a number of ways.  Credit rating becomes a lot less relevant in most carry backs because as long as the down payment is substantial a seller has little to lose if the buyer quits paying, because they can foreclose on the property, and sell it again, keeping the down payment.  An appraisal is not required with a carry back either, so as long as the buyer is content with the purchase price, then the sale can proceed.