If you are new to owner financing, you are usually trying to answer three things at once: who acts as the bank, how payments are structured, and whether you get title right away. Here is a practical overview—always confirm details with a local real estate attorney for your state.
Who acts as the bank?
In seller financing, the seller acts as the lender. The buyer does not borrow from a traditional bank for that portion of the deal; instead, the buyer promises to repay the seller according to a written agreement (often a promissory note) secured by the property.
Tools like OwnerFi Pro help parties organize documents and communication around these arrangements. For free sample forms to review with counsel, see our Owner Financing Documents library on the marketing site.
How are payments structured?
Buyer and seller negotiate the same core terms you would expect from any loan:
- Purchase price
- Down payment
- Interest rate
- Term—often ranging from a few years up to 20–30 years in some deals
The buyer makes monthly payments directly to the seller (or a loan servicer, if one is used). Many agreements include a balloon payment due in 3–7 years, meaning the remaining balance must be refinanced or paid off by that date.
Do I get the title right away?
It depends on the structure:
- Deed of trust / mortgage (state-dependent labels)—the buyer often receives title at closing while the seller (or a trustee) holds a lien until the debt is paid.
- Land contract / contract for deed—the seller may retain title until the balance is paid, depending on how the contract is written and local law.
Recording requirements, foreclosure vs. forfeiture, and consumer protections vary widely—your contract and local counsel drive the answer.
Where to learn more
Browse more articles on the OwnerFi blog, explore ownerfi.app, and sign in to app.ownerfi.app for the full OwnerFi Pro experience.
OwnerFi Seller Financing App
Get the OwnerFi App on Google Play. Sellers can track loans, payments, late fees, and history, share documents, and message buyers. Buyers can view schedules and amortization tables, see reminders, and stay in touch—practical tools for managing owner financing day to day.
Pair the app with OwnerFi Pro in your browser. The app is for managing loans set up with your title company or lender; it does not create a contract or change your existing legal obligations.