What is seller financing?

[lara]

What is seller financing? Can someone explain in simple terms how it works?
Is it similar to a loan from the seller, and what are the pros and cons for buyers and sellers?

 

[amara]

When a seller serves as the lender rather than a bank, this is known as seller financing. According to the terms of the agreement, the buyer pays the seller over time in installments. Both parties require a strong contract and legal protection, but it can assist purchasers who aren't eligible for conventional loans and let sellers earn interest.

 

[luca]

Seller financing is where the seller behaves like a bank and allows the purchaser to pay the seller the property over time as opposed to taking a conventional loan. It is simply a loan between the seller, quicker and more lenient, yet may create more risk to both parties in case there is lack of payments or vague stipulations.

 

[James Miller]

Seller financing is where the buyer of a business or property is financing by the seller of the aforementioned property rather than a bank. The purchaser makes a down purchase and the remaining is received in form of scheduled payments where he or she pays an agreed rate of interest. It is useful when one cannot prove himself to be worthy to have a conventional loan but the two parties must note the agreement in writing so nothing goes wrong in terms of both financial and legal matters.