Seller-Financed Sale


DEFINITION of 'Seller-Financed Sale'

A transaction where the seller also acts as the lender to the buyer. Seller-financed sales thereby eliminate third-party lenders from the transaction. This type of sale can be used to finance the purchase of a home, business or any other type of property.

BREAKING DOWN 'Seller-Financed Sale'

Seller-financed sales generally have no preset lending criteria that must be met; lending institutions do. This type of sale can provide more favorable terms to the buyer, but it may also entail greater risk for the lender. The IRS imposes a mandatory minimum interest rate on seller-financed sales of any kind, although the timing of interest reporting differs depending upon the type of property being sold.

  1. Real Estate

    Land plus anything on it, including buildings and natural resources.
  2. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  3. Mortgage Interest

    The interest charged on a loan used to purchase a residence. ...
  4. For Sale By Owner - FSBO

    A method of selling property without the use of an agent or broker. ...
  5. Minimum-Interest Rules

    A law that requires that a minimum rate of interest be charged ...
  6. Fair Housing Act

    This law (Title VIII of the Civil Rights Act of 1968) forbids ...
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