Seller financed mortgage vs Real Estate Contruct

[Petr Anisimov]

What is the difference between seller financed mortgage and real estate contract?

This is a question I got from my realtor here in Santa Fe, New Mexico who is preparing a purchase agreement in order to submit an offer to the seller. I am going to do my research but want to here from BP community since I do not know what to tell her and the time is of the essence.

I have recently found a property that seller agreed to carry a note for on the following conditions. It is a 340k property with 50k down, 5% interest only loan for 5 years with balloon payment at the end. It should have a decent cash flow and let me test my land lording skills.

I know that real estate contracts are how properties are sold here in New Mexico with seller financing if they have prior mortgage on the property. The buyer pretty much assumes the previous mortgage payments.

In my case, the seller own the property so it sounds more like a seller finance mortgage. How do we structure the paperwork in this case?

Thank you for any information and pointers where to look for this