What Is Seller Carry Back Financing?


Seller carry back occurs when the seller acts as the lender, like a bank, and carries a mortgage or deed of trust on the house being sold. The buyer signs a promissory note with the seller and makes payments to the seller over time. The seller “carries back” the loan amount until the loan is paid off. The seller may carry all or part of the purchase price. The seller financing replaces traditional financing either in part or in whole.

How does Seller carry back work?

The buyer generally pays a down payment and signs a promissory note. All payments go directly to the seller, not the bank. The title company ensures the property has a good title, and the buyer carries title & hazard insurance.

The seller extends credit to the buyer for the purchase price of the home. This will be repaid over time. Parties agree to financing terms before any paperwork is signed. The seller carries the balance, hence the name.

What are the risks of seller carry back?

a. Higher Interest Rate… The interest rate on seller carryback financing may be higher than the rate on a traditional bank mortgage. This can make the loan more expensive for the buyer over time and could make it more difficult for them to afford the payments.

b. Risk for the Seller… If the buyer defaults on the loan, the seller may be looking at costly foreclosure options. This can create stress and significant financial loss for the seller.

c. Lack of Regulatory Oversight… Because seller carryback loans aren’t regulated by the government, there may be fewer protections for the buyer and seller. For example, there may be less oversight to ensure that the terms of the loan are fair and reasonable.

d. Limited Options…  Not all sellers are willing to offer a carry back loan, so it may be more difficult to find a property that fits this type of financing. This can make it harder for buyers to find a home that they can afford.

What is an example of a seller carry back note?

Here are two examples of seller carry back notes:

Example 1: The seller owns a house free and clear and sells it for $250,000. The buyer makes a $50,000 down payment and carries back the $200,000 balance as a note from the buyer, where the borrower promises to pay the $200,000 plus interest in installments. The terms (interest rate, amortization period, amount of each payment and first payment date are negotiated by seller and buyer.

Example 2: The buyer makes a $70,000 down payment 0n the $250,000 purchase price and pays the remaining $180,000 through a seller carry back loan. The buyer and seller sign a note wherein he promises to pay the remaining balance (plus interest) in either a lump sum or installments. The note is then carried by the property and if the buyer defaults, the seller gets it back.

What does it mean seller will carry?

“Seller/Owner Will Carry” or “Seller Financing” is when the owner of the house is financing the loan for the buyer to purchase the property. This means the current owner of the house owes no money on the property and becomes the lender for the home’s buyer. Seller carry is also referred to as a “seller carry back loan,” “seller carry back financing,” or “owner-will-carry” (OWC). In this type of transaction, the seller is acting as a bank and will receive interest payments over the term of the loan

What is a seller carry back?

 A seller carry back is a home financing method in which the seller of the home provides the mortgage financing instead of a traditional lender like a bank. The seller defers collection of some or all of the price of the property and takes a promissory note from the buyer secured by a mortgage or deed of trust on the property. A seller carry back can be a useful tool for both the seller and buyer, but it also has inherent risks for the seller, especially if the seller is not in the first secured position on the loan

What does “seller take back” mean?

A seller take-back mortgage is a unique kind of mortgage where the seller of the home extends a loan to the buyer to secure the sale of the property. Sometimes referred to as a seller take-back mortgage, this type of loan can benefit both the buyer and the seller.

If you are the owner of one or more seller carry back notes…

You have options and this below guide delves beyond the surface, uncovering the secrets of selling your seller carryback note and empowering you to make informed decisions. We’ll shed light on information rarely discussed. Or if you’d like to find out how much your seller carry back note is worth, start by filling out this form:

I'd like BEST PRICE for ALL or PART of My Note

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Let’s shatter a common misconception:

Selling your seller carry back note isn’t just for desperate situations. It’s a strategic move employed by shrewd investors to:

  • Free up capital: Imagine using the cash from your seller carry back to fuel your next investment venture, diversify your portfolio, or finally embark on that dream vacation.
  • Boost cash flow: Get immediate access to funds, perfect for tackling home renovations, a child’s education, or simply enjoying financial peace of mind.

If you are considering selling your seller carry back note, be sure to deal with an investor you can trust.

“Courteous & Helpful”

“Thank you, American Funding Group, for all your help on our mortgage sale. Everyone on your team was courteous and you were on top of everything. The transaction was smooth and timely.”

Here’s the truth most blogs won’t tell you:

The world of note buyers is a maze. Some focus solely on distressed notes, offering bargain-basement prices. Others specialize in specific note types, potentially overlooking yours.

Imagine Elaine, a seasoned investor, inheriting a seller carryback note.

She envisions using the funds to launch her dream eco-friendly cafe. But navigating the complex note-selling landscape feels overwhelming. Enter American Funding Group with its vast network of diverse investors. Elaine’s note finds the perfect match, maximizing its value, and her cafe dream inches closer.

And the story doesn’t end there:

Selling your note can offer lucrative tax benefits. Depending on the deal structure, you might qualify for capital gains deferral, sweetening the pot even further. But remember, navigating these tax nuances requires expertise. We recommend consulting with a financial advisor familiar with note sales to maximize your tax advantage.

When you are searching for a note buyer be sure to check out their testimonials & references. Check out what other noteholders have said about dealing with American Funding group, here.


About American Funding Group

I’m Kevin Clancy, Company President. I am a graduate of the US Coast Guard Academy. After years of military service and high-level corporate financial experience, I’ve dedicated myself to helping people prosper in real estate as one of America’s most trusted mortgage note buyers.

Our company’s core values are:

1) We do what we say, including overcoming obstacles other note buyers can’t overcome.

2) We communicate with you every step of the way so that we can close your sale ASAP.

3) And most importantly…  “We treat You with respect because that’s the way we want to be treated.” That attitude has helped us become one of the most trusted note buying companies.

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Now, let’s address the elephant in the room: risk.

Like any investment, selling your note carries inherent risks. The buyer could default, or the market could fluctuate. It is important to understand how your seller carry back note buyer handles risk. However, by partnering with a reputable company, such as American Funding Group, you significantly mitigate these risks. Our thorough due diligence process ensures you’ll get the best price when selling your note. And you will not have to worry about receiving monthly payments or any future potential default.

Ready to unlock the hidden value in your seller carryback note

and turn it into fast cash? Remember, the key is finding the right partner, one who understands the market, your needs, and can guide you through the process seamlessly. With the right guidance and support, selling your seller carry back can be a smart financial move, opening doors to new possibilities.

And Ready to start your treasure hunt? Explore your options today and watch your seller carryback note transform into the key to unlocking your financial dreams!

What People Are Saying About American Funding Group

Read Our Reviews

“I was happy with their promptness and professional service. Everything was set up and ready to do when we got to the closing table.“

– D.D.

Bayonet, Florida

“Basically, all I did was give the information to you. You took it from there. You had to overcome some problems with the deal, but when it closed, I received my check. From my point of view, it couldn’t have been easier.”

– T.M.

Mesa, AZ

“I wanted to sell my house to my sister, who didn’t have enough credit for a bank loan.  American Funding Group helped. I owner-financed the mortgage for her, less expensively than a bank loan. Then you bought the mortgage, and I received exactly what I needed to pay off my house and put a down payment on a new one.”

– S.A.

Canastota, New York

Primary States in Which We Buy Seller Carryback Notes:

To get started… to see how much money your seller carry back is work, please fill out the below form:

I'd like BEST PRICE for ALL or PART of My Note

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