Should A Landowner Offer Seller Financing? -

Selling your land is an excellent idea if you want some profits. As the owner of the property, you have the option to sell it with the buyer getting a mortgage from a traditional lender, or you can sell it with seller financing.

Of course, seller financing to the landowner has upsides and downsides. It's advised that you do your assignment to learn what seller financing is and whether it's a good idea for you as a land seller.

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What is Seller Financing?

Seller financing, also known as landowner financing, is an option on the part of the land seller to provide funds to the land buyer instead of the latter obtaining a mortgage from a traditional financial institution or lender.

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Typically, the property buyer makes a down payment to the seller, but the amount is more flexible than the traditional mortgage down payment.

The financing arrangement should be written in a binding contract - such as a promissory note [1] - agreed by both the seller and the buyer. It should specify both parties' monthly payments, interest rates, repayment terms, and responsibilities.

Advantages of Seller Financing

Seller financing has its benefits to the owner of the property. Here's a list of reasons why handling the mortgage process when selling land can benefit the seller.