What is a seller carry back in real estate?

A seller carry back is an agreement in which the seller provides financing to the buyer as part of the purchase of a property. This arrangement typically allows the buyer to pay a portion of the purchase price upfront while the seller covers the remainder through a loan, enabling the buyer to finance their home without needing a traditional mortgage from a bank or financial institution.

This option is particularly beneficial in situations where buyers may struggle to qualify for standard financing or when they wish to negotiate more favorable terms. In such cases, the seller essentially becomes the lender, and the terms of repayment, including the interest rate and amortization schedule, are agreed upon between the parties involved.

Understanding this concept is crucial in real estate transactions, as it can facilitate deals that might not otherwise happen, ultimately allowing sellers to attract more buyers and buyers to gain access to properties within their financial reach.