Boston, MA · Member since 2026 · 15 posts · 8 votes
Seller financing lets you buy a property without ever qualifying at a bank.
When a seller owns a property outright (or has strong equity), they can act as the lender — you make monthly payments directly to them instead of to a mortgage company. The down payment, interest rate, and loan length are all negotiable between the two of you, which can mean lower closing costs and more flexible terms than a conventional loan.
Example: instead of financing $200,000 through a bank, you agree to pay the seller directly at a negotiated rate over a set number of years — no bank underwriting in the middle.
Takeaway: Put every term in writing with a real estate attorney, and confirm there's no existing mortgage with a due-on-sale clause before you structure the deal.
Good breakdown, especially the due-on-sale flag at the end. That one catches people.
One thing I'd add on the negotiation side: sellers tend to focus on price, so the terms are often where the real flexibility is. A seller who won't come down another $50k will sometimes agree to a lower rate, a longer amortization, or an interest-only period for the first year or two, and depending on the deal, any of those can be worth more to you than the price cut. Worth asking about the terms separately rather than treating it as one negotiation.