Owner financing is a transaction in which the property seller funds the purchase directly with the person or entity purchasing it, either entirely or partially. Because it avoids the overhead of a bank middleman, this sort of agreement can benefit both sellers and purchasers. On the other hand, owner financing might expose the owner to far more risk and responsibility.

• Owner financing is sometimes called “creative financing” or “seller financing.”
• When owner financing is a possibility, this sort of financing is often indicated in a property advertisement.
• Owner financing requires the seller to assume the buyer’s default risk, although owners are generally more ready to bargain than traditional lenders.