How does seller financing work?
In rare cases, a seller will agree to loan you part or all of the money to buy the property. This can happen when you can’t borrow enough money from a bank or commercial lender or when the seller wants to spread his or her income from the sale over a number of years. This can be carried out in one of two ways. The first possibility is for the seller to take back a mortgage on the house. You, the buyer, sign both a promissory note (promising to repay the loan) and either a mortgage or a deed of trust (allowing the seller to foreclose if you fail to pay). In return, the seller signs a deed transferring title to you. Because you hold the title, you can sell the house or refinance. But you must keep making the agreed-upon payments to the seller. The second and less popular possibility is for the seller to keep title to the property for as long as it takes you to pay off the loan. The contract you and the seller sign is known by various names, including “contract for deed,” “contract of sal
