Most of the time we think of seller financing as being provided by the seller when we buy, but when it comes to converting equity into cash flow, seller financing and leasing are the two principal techniques we use. The best thing one can say about seller financing that you provide to a buyer who is buying your house is that there are very few rules except to create a Note or Contract that spells out the terms of the transaction and to find a way to secure it. As a rule, when a seller provides financing, the price can be adjusted to reflect any risk that might be posed by buyer’s with lower FICO scores, and the interest rate can be fiddled according to the degree of motivation of the parties. Additionally, net settlement costs are usually lower when the seller can create the documentation he or she needs.
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