Seller Financing Home Buyers Guide: Key Considerations in Seller Financing Deals

1. Determining the Property’s Fair Market Value

Before finalizing a seller financing deal, it’s crucial for both parties to assess the fair market value of the property. Accurately determining the property’s value ensures that the purchase price aligns with the current market conditions. Sellers should aim to set a competitive price that attracts potential buyers, while buyers should conduct thorough research to ensure they are making a reasonable investment.

2. Setting the Interest Rate and Terms

The interest rate and terms of the seller financing agreement significantly impact the overall cost and affordability for the buyer. Sellers should consider prevailing interest rates, their own financial goals, and the buyer’s creditworthiness when setting the interest rate. Negotiating favorable terms that benefit both parties is essential for a successful seller financing deal. Clarity and transparency in the terms help avoid future disputes.

3. Down Payment and Balloon Payments

Deciding on the appropriate down payment is a crucial aspect of a seller financing deal. A higher down payment may reduce the seller’s risk, while a lower down payment can make homeownership more accessible to the buyer. Additionally, some seller financing agreements include balloon payments. A balloon payment requires the buyer to make a lump-sum payment at a specific point during the loan term. Buyers should carefully evaluate their financial capacity to meet such payment obligations.

Advantages of Seller Financing Deals

  • Flexibility in Financing: Seller financing offers flexible terms and conditions that may not be available through traditional lenders.
  • Wider Buyer Pool: Seller financing attracts a broader range of buyers, including those with non-conforming credit or unconventional financial situations.
  • Quicker Closing: The absence of lengthy loan approval processes expedites the closing of the deal.

Risks and Considerations in Seller Financing Deals

  • Default Risk: Buyers must be cautious not to default on payments, as it can lead to the seller reclaiming the property.
  • Property Valuation: Overvaluing the property can deter potential buyers, while undervaluing it can lead to financial losses for the seller.
  • Market Conditions: Both parties should consider market conditions and potential fluctuations that may affect property values and interest rates.

Legal and Financial Advice

To ensure a successful seller financing deal, both buyers and sellers should seek legal and financial advice. Real estate attorneys can review the agreement to safeguard the interests of both parties and ensure compliance with local laws. Additionally, consulting with financial advisors helps buyers assess their financial capacity and plan for the purchase effectively.


Dustin Zeller is a real estate agent who specializes in helping home buyers purchase homes through seller financing. This type of financing requires a down payment, typically 10-20%, but offers more flexible requirements than traditional bank financing. Dustin Zeller has 20 years of experience in this field and can help buyers with low credit scores or those who are self-employed. You don’t need a social security number. All you need is a down payment and a desire to buy a house. Interest rates can often be better than current mortgage interest rates. Anywhere from 1 to 2% better. Dustin Zeller will put the deal together to keep you safe.

Dustin Zeller

20 Years Experience, Skilled Negotiator, Creative Financing Guru

Dustin Zeller | Seller Financing Expert




8871 Sandy Pkwy STE 100 Sandy, UT 84070

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