Rehab Flipping homes

[Gena Goff]

Hi, Rookie here,  I copied and paste this description from realtor.com what does seller finance mean?

SELLER FINANCING with only $15, 000 Down Payment at around a $1, 500 Monthly Payment!! Come and see this property in the Sanger Heights Residential area! This property has 3 bedrooms and 1 bathroom with central heat and air, open floor plan for living, dining and kitchen. Washer and dryer connections available in the home, ceiling fans and beautiful original hardwood floors! Some minor TLC, but MOVE IN READY!!!

[Ryan Coon]

Seller Financing means that the intent is for the seller to loan the buyer the money to close, rather than using a traditional mortgage lender. Thus, at the close of the transaction, the buyer has the property and owes the seller for the difference between the purchase price and the down payment.

Seller financing can be beneficial for the seller if they are looking to come away from the sale with a passive income stream (monthly loan payments) and it allows them to make some extra money via the interest on the loan.

The buyer can also benefit from seller financed deals because the buyer is much more likely to be able to negotiate terms they may not be able to get with a traditional lender. It can also allow buyers with low or bad credit to purchase where a traditional lender wouldn't be willing to lend due to their less than ideal credit.

Seller financed deals are typically structured with a Promissory Note to outline the terms of the loan and a Deed of Trust or Mortgage to give the seller/lender a security interest in the property which can allow the seller/lender to foreclose on the home to recover the balance due if the buyer/borrower defaults.