To buy a house with seller financing, you agree on a price and terms with the seller, make a down payment, and sign a promissory note at a title company or attorney's office. The deed is recorded in your name that day. After that you make monthly payments on the note instead of to a bank.
Step 1: Know your numbers before you look
Start with two numbers: how much cash you have and how much you earn each month. Seller financing usually needs a larger down payment than a bank loan. In our program it's normally 20 percent of the price we negotiate, plus closing costs of about 2 to 3 percent.
So for a $300,000 home, plan on about $60,000 down and $6,000 to $9,000 in closing costs. Then make sure the monthly payment, taxes and insurance fit comfortably inside your income.
Get your income proof together now. Bank statements, pay stubs, tax returns, 1099s or a profit and loss statement all work, depending on how you earn. In our program a licensed loan originator verifies that income, so the cleaner your paperwork, the faster you get an answer.
Step 2: Find a home and a seller who will finance it
This is where most buyers get stuck. Most homeowners have a mortgage and need to be paid in full when they sell, so they can't carry a note for you. The ones who can are usually owners with the house paid off, or investors.
That's why our program works the other way around. You pick the home you want, including homes listed with an agent, for sale by owner, new construction, or off-market homes from our investor network. We negotiate the purchase and provide the financing. Pick three, so there's a backup if a seller says no.
Step 3: Get every term in writing
Before anything is signed, you should see the price, the down payment, the interest rate, the length of the loan, the monthly payment, the late fee, and who collects the payments.
Two terms deserve a hard look. A balloon payment means the whole remaining balance comes due on a set date, often just a few years out, whether or not a bank will lend to you by then. A prepayment penalty charges you for paying off early, which hurts when you refinance. Our notes have neither.
Step 4: Close with a title company or attorney
Never close a seller financed purchase on a kitchen table. A title company or real estate attorney should search the title, confirm the seller can sell, collect your deposit in escrow, and record the documents with the county.
You'll sign a promissory note and the document your state uses to secure it. That's a mortgage in Florida, Alabama and South Carolina, a deed of trust in North Carolina and Maryland, and a security deed in Georgia. The deed goes in your name at the same closing. If a seller wants to hold the deed until you've paid in full, that's a land contract, and it carries much more risk for you.
Watch where your deposit goes. It belongs with the title company or attorney, held in escrow, never handed to the seller directly. In our deals it goes to a third-party title company or attorney within 48 hours of clear to close, and it's refunded if the deal doesn't close.
Step 5: Pay through a servicer and plan your refinance
Ask for a third-party servicing company to collect your payments. It keeps an independent record of every payment, which protects you if there's ever a dispute and helps when you apply to refinance. Our buyers can log into the servicer's portal any time.
Most buyers use seller financing as a bridge. Pay on time, let your credit recover, and refinance into a bank loan when it makes sense.
How this works with Sold With Financing
We handle steps two through five with you: negotiating the home, putting the terms in writing, closing through a title company or attorney, and setting up servicing. Typical closings take 30 to 45 days. See the full process on how it works, or read how closings run in owner financing homes in Georgia, where an attorney handles every closing.