When a homeowner has difficulty selling his or her home in a buyer’s market such as we are now experiencing with tight lender guidelines, owner financing is a desirable option for both seller and buyer. How this works is that the seller carries the purchase price – minus the down payment provided by the buyer.
Sellers usually require a sizeable down payment to protect their equity as they believe buyers are less likely to default if they have invested a chunk of their own money in the transaction.
If there are no loans on the property and it is owned by the seller free and clear, one of the many types of financing includes a land contract. In this type of transaction, the buyer obtains equitable title. Legal title does…