What is it called when a seller provides financing to the borrower for a purchase transaction?

When a seller provides financing to the borrower for a purchase transaction, it is referred to as a seller carry back. This arrangement allows the seller to act as a lender, enabling the buyer to purchase the property even if they may not qualify for a traditional mortgage. In a seller carry back, the seller essentially holds a note or loan for a portion of the purchase price, which the buyer agrees to pay back over time, typically involving interest.

This option can be advantageous in various scenarios. For instance, if a buyer is unable to secure full financing through conventional means due to credit issues or other factors, a seller carry back can facilitate the sale. Furthermore, it can provide the seller with additional income in the form of interest on the loan, making it a mutually beneficial arrangement.

Other options do not accurately describe this financing arrangement. "For sale by owner" refers to a property being sold directly by the owner without the involvement of a real estate agent. "Seller concessions" involve the seller offering to pay a portion of the buyer's closing costs, rather than providing financing. "Seller self-financed" is not a widely recognized term in real estate transactions, further highlighting that seller carry back is the most appropriate term for the described scenario.