Myrtle Beach Real Estate Blog

Seller financing may just be the great untapped market in terms of win-win situations for a variety of reasons.

Interest rates are still relatively low, but credit is tightening a bit, making loan qualification more difficult for borderline buyers. The future is a bit uncertain, and interest rates are creeping up while demand seems to be leveling off.

Why should a buyer or a seller look to alternative financing because of this? In some cases, it can be good for both sides, and it can offer a way to simplify a transaction rather than adding additional layers of complication. It takes a good amount of consideration to determine if seller financing is a good move - buyers and sellers alike should speak with a financial professional to see how this would affect their current situation.

A History of Financing

While long-term mortgage financing is by far the most prevalent way to buy and sell real estate, it has never been the only way. Until the mid-20th Century, long-term mortgages were unheard of, even for commercial property. Cash ruled and, if terms were offered, it was usually for a short-term payout.

Farm property often changed hands by means of casual agreements to make payments out of successive harvests, sometimes with provision for a "balloon payment" after X number of years. The arrangement allowed newcomers and younger generations of farmers to build equity without having to save up for cash purchases of land.

A legal document known variously as a Contract for Deed or Land...