Seller Financing

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DEFINITION of 'Seller Financing'

A real estate agreement where financing provided by the seller is included in the purchase price. It is also known as a purchase-money mortgage. A purchase-money mortgage is a mortgage given to the seller as part of the buyer's consideration for the purchase of the property and is delivered at the same time that the real property is transferred as a simultaneous part of the transaction.

INVESTOPEDIA EXPLAINS 'Seller Financing'

Seller financing is usually implemented when the buyer does not have the necessary credit to purchase the home. It can be an incentive for the potential buyer to purchase the property, and can be done when a buyer cannot qualify for a traditional mortgage.

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