School me about seller financing

[Franky Juwana]

hi all, 

   I heard the term seller financing alot, but I know very little about how it works.  Who do you put in the deed in terms when buyer and seller agreed in seller financing? and how does seller execute when buyer stop paying the payment(s)?  Can buyer rent the property while seller financing in effect and does the buyer need seller approval due or even share the rent to seller still own the property per se? 

thank you 

[Carlos Rovira]

@Franky Juwana In a seller financing situation, the seller sells the property to the prospective buyer and then assumes a first mortgage position. The buyer would potentially provide a down payment (agreed by both parties) and then the seller will hold a promissory note for the difference between the sales price of the property and the down payment provided by the buyer.

In essence, the seller then becomes the bank/lender and then must follow all of the same laws that lenders must follow in the event of a default and formal foreclosure proceedings must occur.

In regards to the renting of the property. Once the sales goes through, the buyer is the new owner and can rent the property (assuming the terms of the mortgage do not restrict this). No sharing of rent is required. The buyer will pay the seller a "monthly mortgage payment" with whatever terms are negotiated at the time of sale.