What is meant by "seller financing"?

Seller financing refers to a scenario in which the seller provides financing directly to the buyer to facilitate the purchase of the property. In this arrangement, instead of the buyer obtaining a traditional mortgage from a bank or lending institution, the seller acts as the lender, allowing the buyer to make payments over time based on agreed-upon terms. This can often simplify the transaction for both parties, especially in situations where the buyer may have difficulty securing a conventional loan.

Typically, the seller will hold a promissory note and a mortgage, leading to a structured process where the buyer makes regular payments to the seller. This method can be attractive to buyers who may require flexible terms or are looking for quicker transactions, while sellers may appreciate the opportunity to sell their property more quickly without the hurdles often faced with traditional financing routes.