Seller Financing and Creative Terms

The core terms

• Purchase price and down payment: the seller's equity position and your cash at closing.
• Interest rate and amortization: how payments are calculated and over how many years.
• Balloon: a date when the remaining balance is due in full. Plan your refinance or sale before you sign.
• Security: a recorded mortgage (or deed of trust in other states) that gives the seller a lien, plus a promissory note.
• Servicing: who collects payments, tracks escrow for taxes and insurance, and issues year-end statements. A third-party servicer protects both sides.
• Prepayment, late fees, default, and cure periods: read them as if you will need them.

Structures you will hear about

'Seller financing' usually means the seller owns the property free and clear, or pays off the existing loan at closing, and carries a new note. 'Subject-to' means the buyer takes title while the seller's existing mortgage stays in place. A 'wrap' layers a new seller note around that existing loan. Subject-to and wraps carry a specific risk: most mortgages have a due-on-sale clause that allows the lender to demand payoff when title transfers. Investors who use these structures do so with eyes open, written disclosures, and counsel.

Due diligence specific to creative deals

• Title search and owner's title insurance, exactly as you would with a cash purchase.
• Existing liens, payoff statements, and whether the seller's loan is current, for any subject-to or wrap structure.
• Property insurance in your name or with you as an insured, and how the lender of record is handled.
• Property taxes: the assessment resets on change of ownership, so escrow the right number.
• Who the end user of the home is. If a buyer will live in the property, federal and state rules around seller financing to consumers may apply. Have a Florida real estate attorney structure the documents.

How Dispo Pipeline presents creative terms

We show seller-financing or other creative terms on a property only when the seller or controlling party has actually agreed to them in writing and our team has reviewed them. The terms block on a listing carries a reviewed-on date. If a listing shows no creative terms, none were offered. We do not arrange, broker, or fund loans.

Questions to ask before you make an offer

• Why is the seller willing to finance, and what do they need from the structure?
• What is the full cost of capital once you include the rate, the balloon, and the points you would pay to refinance?
• Does the property cash-flow at the note payment plus taxes, insurance, and reserves?
• What is your exit if the refinance market is worse at balloon time?