What Is Seller Financing and Why Would a Seller Agree to It?

Seller financing, also known as owner financing, flips the traditional home sale model.

Instead of a bank providing the loan, the seller becomes the lender and collects monthly payments directly from the buyer.

But why would a seller agree to that? And how does it benefit investors and homeowners?

At Mac Does REI, we use seller financing to create win-win scenarios where banks fall short. Here is how it works and why sellers say yes.

What Is Seller Financing?

In a seller-financed deal:

• The buyer makes a down payment
• The seller carries the remaining balance
• A note and deed of trust secure the agreement

The buyer receives the deed and the seller receives monthly income, often at higher-than-market returns.

Why Would a Seller Agree to This?

1. They Want Monthly Cash Flow

Instead of receiving one lump sum, the seller earns steady payments, often at 8 to 10 percent interest.

2. They Reduce Taxes

Selling with terms allows capital gains to be spread out, lowering the immediate tax burden.

3. The Property Needs Work

Homes that require repairs often will not qualify for traditional financing. Investors are willing to buy these properties as-is on terms.

4. It Is Hard to Sell Traditionally

Rural, outdated, or unique properties may struggle on the MLS. Offering terms widens the buyer pool.

5. They Want a Higher Sale Price

When sellers offer flexible terms, they can typically command a higher price.

A Real-Life Example

We recently worked with a retired homeowner who wanted income without tenants.

We purchased her home with 0 percent interest seller financing for 10 years. She now collects $700 per month with no management or maintenance.

We restructured the deal and turned it into over $1,300 per month in cash flow.

Benefits for Buyers

Seller financing offers major advantages to investors and self-employed buyers, including:

• No bank approval required
• Faster closing
• Flexible terms
• Full control of title and appreciation

This strategy opens doors when traditional financing is not an option.

Seller financing is not just an investor tactic. It is a practical solution for homeowners who want flexibility, income, and control.

When structured correctly, it creates long-term benefits for both buyer and seller.

Curious if seller financing could work for your property? Contact Mac Does REI and we will walk you through a structure that benefits both sides.

Visit MacDoesREI.com to get started.