Which term describes the financial transaction where a seller provides financing directly to the buyer?

Which term describes the financial transaction where a seller provides financing directly to the buyer?

• A. Conventional purchase
• B. Seller financing
• C. Investment sale
• D. Lease purchase option

Answer: (B)

Seller financing refers to a financial arrangement where the seller takes on the role of the lender, allowing the buyer to purchase the property by making direct payments to them rather than obtaining a mortgage from a traditional financial institution. In this scenario, the seller provides the necessary capital for the buyer to acquire the property, which can be beneficial for buyers who may have difficulty securing conventional financing due to credit issues or other reasons. This type of financing can also allow for more flexible terms, as the seller and buyer can negotiate the interest rate, payment structure, and other conditions directly. Seller financing benefits sellers by making their property more attractive to potential buyers, potentially speeding up the sale process and allowing them to earn interest on the amount financed. The other terms do not fit the description provided. A conventional purchase involves standard financing through a bank or lender, an investment sale typically refers to a transaction aimed at generating income, and a lease purchase option is a rental agreement that may lead to a property purchase but does not involve direct financing from the seller.

Seller financing refers to a financial arrangement where the seller takes on the role of the lender, allowing the buyer to purchase the property by making direct payments to them rather than obtaining a mortgage from a traditional financial institution. In this scenario, the seller provides the necessary capital for the buyer to acquire the property, which can be beneficial for buyers who may have difficulty securing conventional financing due to credit issues or other reasons.

This type of financing can also allow for more flexible terms, as the seller and buyer can negotiate the interest rate, payment structure, and other conditions directly. Seller financing benefits sellers by making their property more attractive to potential buyers, potentially speeding up the sale process and allowing them to earn interest on the amount financed.

The other terms do not fit the description provided. A conventional purchase involves standard financing through a bank or lender, an investment sale typically refers to a transaction aimed at generating income, and a lease purchase option is a rental agreement that may lead to a property purchase but does not involve direct financing from the seller.