What Are Good Seller Financing Terms When Selling Your House or Land?
What Is Seller Financing?
Seller financing (also known as owner financing) is when the seller of a property acts as the lender instead of a bank. The buyer makes monthly payments directly to the seller—usually including interest—until the home or land is paid off.
It’s a creative way to sell a home or vacant land quickly, especially when buyers can’t get traditional financing or when the property isn’t eligible for a bank loan.
Why Sellers in Utah Use Owner Financing
Seller financing can be a win-win. It’s especially useful for:
- Selling vacant land (which banks rarely finance)
- Homes with non-traditional features or condition issues
- Buyers who don’t qualify for conventional loans
- Tired landlords looking for passive income
- Sellers who want monthly cash flow instead of a lump sum
You can offer flexible terms, sell faster, and even earn more over time from interest.
Key Terms in a Seller Financing Deal
If you’re thinking about offering seller financing, here are the core elements you need to understand:
1. Purchase Price
Set a fair market value based on the property’s condition and location. Seller financing often allows for a slightly higher price because you’re offering flexibility.
2. Down Payment
This is what the buyer pays upfront. In Utah, 10% to 20% is common—but you can set whatever works for you. A larger down payment reduces your risk.
3. Interest Rate
You’re allowed to charge interest, just like a bank. Rates between 6% and 10% are typical for seller-financed deals. The riskier the buyer, the higher the rate.
4. Term Length
How long the buyer has to pay off the property. Common options include:
- 5 to 10 years (with a balloon payment at the end)
- 30 years fully amortized (just like a traditional mortgage)
5. Monthly Payment Amount
Based on the interest rate and loan term, the buyer will make a monthly payment. Make sure this covers your expectations and offers a reasonable return.
6. Balloon Payment
Many seller-financed deals end with a large “balloon” payment after a set time (e.g. 5 years), at which point the buyer refinances or pays the balance in full.
7. Late Fees, Default Terms, and Insurance Requirements
Just like a lender, you can charge late fees, require the buyer to maintain insurance, and spell out what happens if they stop paying.
Pros of Seller Financing (For Sellers)
- Steady monthly income
- Higher sale price potential
- Fewer closing costs
- Can sell “as-is” without repairs
- Wider pool of buyers—especially investors or self-employed buyers
Risks of Seller Financing (And How to Protect Yourself)
Like any investment, seller financing has risks. But with the right protections in place, you can reduce your exposure:
- Do a background check on the buyer
- Use a real estate attorney to draft the note and deed of trust
- Require a strong down payment
- Consider placing the property in an LLC for liability protection
- Record all documents with the county recorder’s office
Best Properties for Seller Financing
Seller financing is commonly used in Utah to sell:
- Vacant land
- Manufactured homes
- Fixer-uppers
- Homes with title issues
- Inherited properties
Buyers who struggle to qualify for loans may be willing to pay more or accept stricter terms to get a deal done.
Don’t Want Monthly Payments? Sell for Cash Instead
If managing monthly payments sounds like more hassle than it’s worth, Scout Peak Home Buyers can offer an alternative.
We buy houses and land in Utah for cash, no matter the condition or situation. No waiting. No agents. No seller financing complications.
You’ll get a lump-sum payment, avoid taxes and fees, and close on your schedule.
Final Thoughts
Seller financing isn’t for everyone—but it can be a powerful tool if you:
- Want to attract non-traditional buyers
- Are OK with getting paid over time
- Want to sell hard-to-finance property like land or manufactured homes
Make sure you understand the terms, protect yourself legally, and work with a professional if needed.
Want to Explore Your Options?
At Scout Peak Home Buyers, we work with Utah sellers who want to sell for cash or structure creative seller-financed deals that make sense.
Let’s talk about your property and goals—we’ll help you figure out the best path forward.
Request a no-obligation cash offer or seller finance strategy today.