Advantages = quicker close, easier to qualify

Disadvatage = higher interest rate

Risk to the seller. Why would a buyer typically need seller financing? Probably because a financial institution considers them too much of a risk.

Richard Weeks has this one....

https://activerain.com/blogsview/4863251/seller-financing---when--owner-will-carry-

 Your classmates beat you to it already. When in doubt you may type in the question in SEARCH BOX.

Sellers might not need all of the money at once, and can charge a higher interest rate. They still should require a downpayment of at least 20% in most cases. A disadvantage could be that buyer defaults and disappears and they have to do a take back.

Richard Weeks and your answer.

I never had that situation kennith Frazier 

Actually what could be better security than the home that was sold? Of course there has to be lots of equity there and the seller not needing all $$$$. The interest rate would beat banks however is the seller in a position to take the home back if defaulted? Would they want to?

Seller gets the house back if buyer defaults.

There are tax and deferred income to the seller...may more.

The seller takes the typical lender risk or slow or no payment, collection and possible foreclosure.

For the buyer: perhaps easy qualifying. Perhaps no appraisal. Maybe other savings.

Not a popular option for the last 10-12 years a a minimum. If a buyer can’t qualify in today’s age they should not own!
In the days of yester year when rates were in the high teens, a seller might gamble if they needed to sell and off lower rate financing to make it happen.

Avantages for buyers - typically no loan fees, keeps their available credit free for other project, they can possibly find a seller that's comfortable with their financial scene when traditional lenders aren't.

Avantages for seller - they can probably get a better return in interest than many other forms of investment and it's secured by a property they are familiar with. Tax benenfits for receiving money over time rather than all in one tax year.  Are the two big adavntages that stand out in my mind.

Advantage for both sides - no appraisal. No appraisal fees for the buyer, no appraisal work orders for the seller. No deal breaking low appraisal issues for either side.

Disadvantages - it's a pain in the neck and can be expensive to foreclose so there's risk. To keep things straight one will want to set up a collection/escrow account to handle the monthly collection of payments and distributions and handle the transfer of title and/or lien release at the end so there's a fee for this service than is not needed with a traditional loan from a lender.

Can sell the property for a higher price, but you may get it back in pretty rough condition.

I am with Richard.

Seller financing is a difficult one. Seller usually has no idea if they will get paid back. Seller has to do accounting for the payments and send the IRS and state the records every February. Seller may have to foreclose and take the property back in poor condition. Seller has to keep records, what if they suddenly want to make lump sum payment or have a fire?

Advantages for Buyer- qualifying might be faster and easier.

It depends on the type of propert and many other factors. Default is one of the biggest concerns.

Seller can spread out their capital gain into multi years to avoid a higher tax rate

They are used more in a recession than this market. I see them most often in investment property and not owner occupied. It lets someone buy a home who does not qualify conventionally

Seller get a buyer into their questionable property and the buyer has ownership of a property they couldn't qualify for by conventional means.  If the buyer doesn't fulfill the terms of the loan, the seller gets the property back.

Risky for sellers, a dream for buyers who can't qualify for a traditional mortgage.

The advantage is to the buyer when they have no other options and to the seller when it meets their needs.

Instead of 20 Questions per day...

I wish you all the best with your real estate studies.

It depends on which side of the transaction you're on.  It can be a win/win done correctly with honest parties involved... and THAT, my dear Kennith, is the caveat. 

For sellers the risk is loan default and the subsequent foreclosure process. I never reccomend it with houses unless the buyer is stellar but it is usually a good deal for the seller on raw land.

No idea. 

Have yet to have one.

The reason the banks have all the money is because there is LOTS of money to be made in lending.

When you can be the bank, you can make a lot of money and solve some problems for those who find themselves a bit short.

RED ALERT
Lending money to a occupant buyer can be a speedy path to bankruptcy. Make sure you know more than the borrower. If they know more than you...you're toast.

...

Great answers already..I have to think about it..

You have the answers from our illustrious membership.  Always advise your clients to talk to a financial expert, before making this decision.  A