The world of real estate can be hard, especially when the future market is uncertain due to a global pandemic. Even if a seller does find a willing buyer, there’s no guarantee that the buyer will be able to get the financing to complete the purchase, which is the primary reason property owners sometimes consider seller carryback financing, which is a concession that can be leveraged to seduce buyers.

In this blog, we will discuss what you need to know about seller carryback financing if you decide that you are interested in entering a seller carryback agreement.

What is Seller Carryback Financing?

This type of financing is owner financing. The seller acts as a lender, continues to carry the mortgage on the property, and collects monthly payments from the buyer.

This type of financing is also often referred to as seller or owner financing.

When to Consider Seller Carryback Financing

This type of financing is ideal for borrowers who have low credit scores. The property owner can help the buyer flexibly take over the property. Plus, carrybacks are typically shorter terms than traditional loans, so ideally, at the end of the term, the borrower may be able to obtain financing from the bank.

If a property owner is having difficulty selling a piece of property, seller financing may be worth considering, which would make the property more attractive. This can also increase the sale price of the property and the owner will collect interest on the monthly payments.


Just like a traditional lender, sellers must be aware of the risk that a buyer may not make payments. In some cases, when a borrower has bad credit, that risk may increase.

Advantages/Disadvantages of Seller Carryback Financing

Owner financing can speed up the sales process. It keeps the buyer from having to go through the process of qualifying for a mortgage. Plus, it saves them appraisal fees, closing costs, and other expenses associated with real estate transactions. Plus, it allows the seller to make money once they factor in interest.

That being said, seller carryback financing typically has a higher interest rate than conventional financing. For the seller, there is the risk that the borrower may not pay the loan, which means the owner must foreclose on it. Finally, this option means that the seller gets the money for the property in installments rather than all at once.


If you want to know more about seller carryback financing or how to list your property with that option, contact Means Commercial Capital. We will be more than happy to help you sell your property quickly with seller carryback financing.