#seller-financing

#seller-financing

So Austin decided to try something a bit unconventional. He offered seller financing - an agreement in which the seller acts as the lender, typically providing the buyer with a short-term home loan. In Austin's case, he held firm on the home's sale price, but offered a below-market interest rate to entice buyers. As soon as he offered the creative financing option, interest picked up.

Owner financing, sometimes called seller financing, is when the home seller acts as the lender instead of a bank. Instead of applying for a traditional mortgage , the buyer makes payments directly to the seller based on an agreed loan term and interest rate. Think of it like the seller extending credit to the buyer: the buyer pays in installments over time, and the seller holds the financing note until the property is paid off or refinanced.

This gives sellers a way to finally make a move they've been waiting a long time for, said Dennis Doss, CEO of DossDocs. They can go from a 2.5% to an effective 4% rate instead of jumping straight to 6.5%. It's a win-win for the seller and the buyer, who finally have something easy to work with. Also known as an all-inclusive trust deed (AITD), the wraparound structure is often overlooked because of its complexity, a press release from the California-based company explained.