How it works
With seller financing, you act as the lender for part or all of the purchase price. The buyer makes a down payment and pays you principal and interest over an agreed term, secured by a note and deed of trust on the property.
Why owners consider it
It can provide steady monthly income, may spread out taxable gain over several years (ask your CPA about installment-sale treatment), and can widen the pool of buyers. Terms can sometimes support a stronger price.
Risks to understand
If the buyer stops paying, you may need to foreclose and take the property back, possibly in worse condition. Down payment size, the buyer's experience, and protections in the note all matter. If you still have a mortgage, your lender's consent may be required.
Get professional help
Use a real estate attorney to draft the note and security documents, and consider a loan-servicing company to collect payments and keep records.
This guide is general information, not legal, tax or financial advice. Talk to your own advisors about your situation.
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