What is primary seller financing?

Primary seller financing occurs when the seller of a property takes on the role of the lender, providing financing directly to the buyer. In this scenario, the seller becomes the primary source of funds necessary for the buyer to purchase the property, often allowing for more flexible terms than traditional lending institutions. This arrangement can benefit both parties; the buyer might gain easier access to financing, while the seller has the opportunity to receive regular payments plus interest, essentially becoming a real estate investor.

In contrast, the other options describe different scenarios. For instance, financing provided by a mortgage broker indicates a third party is involved, while financing through a bank signifies a conventional loan process that does not involve the seller’s direct participation. The concept of joint financing from multiple lenders refers to a collaborative effort to provide funds, which is also distinct from seller financing, where the seller acts independently as the financier.