Which type of financing allows the buyer to pay the seller directly over time?

Seller financing is a financing arrangement in which the seller of a property provides a loan directly to the buyer to facilitate the purchase. This method allows the buyer to pay for the property over time, typically through a series of installment payments that can include interest. In this arrangement, the seller essentially acts as a lender, which can be beneficial for buyers who might have difficulty securing traditional financing through banks or mortgage companies.

With seller financing, the terms of the loan, including the interest rate and payback schedule, are negotiated directly between the buyer and the seller. This flexibility can often make the transaction smoother and more accessible, as it may not be subject to some of the more stringent requirements of conventional loans or government-backed loan programs.

This option is particularly useful in situations where buyers may want to avoid high closing costs or when sellers want to facilitate a quicker sale without involving a third-party lender.