Glossary · FINANCING

Seller Financing

A transaction where the property seller provides the loan directly, eliminating the need for a traditional bank mortgage.

In seller financing, the seller acts as the lender. The buyer makes monthly payments to the seller under a promissory note secured by the property. The buyer gets the deed at closing. Key terms are negotiated directly: purchase price, down payment, interest rate, amortization period, and balloon date. Seller financing is most common when the seller owns the property free and clear and is motivated by installment-sale tax benefits or ongoing income rather than a lump-sum. The strategy allows buyers to acquire without bank underwriting, credit scrutiny, or institutional loan count limits. It is the foundation of most creative real estate acquisition strategies.

Related Terms

Balloon Payment

A lump-sum principal payment due at the end of a loan term, typically after years of interest-only o

Installment Sale

A sale where proceeds are received over multiple years, allowing capital gains to be spread over the

Owner Financing

Synonym for seller financing - a transaction where the property seller provides the loan directly to

Promissory Note

A signed legal document in which the borrower promises to repay a specific amount under defined term

Seller Carry

The portion of the purchase price the seller agrees to finance directly, rather than requiring full

Apply this in real deals

Command Center models seller-financed acquisitions, balloon timing, NOI projections, and refinance scenarios. Underwrite faster, with confidence.

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