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What is Seller or Owner Financing?

Seller financing is when the Seller of a property agrees to act as the bank and directly finances a purchase for the Buyer, most common in land purchases.

  • Usually, the down payment is at least 20%
  • The interest rate and the amount of payment are all negotiable
  • The remainder can be spread over 5, 10, 15 years, or more
  • Usually, there is a 5 or 7-year balloon payment
  • It is best to have the payments handled by an escrow service

This provides an affordable way for a Buyer to acquire a property, but the seller
generally needs to own the property free and clear in order to offer this option.


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