With the low prices on real estate these days, acquiring a piece of real property as an investment sounds very attractive. These could be sold at a hefty profit later when prices go back up. A 20-percent down payment for a house and lot has now become readily affordable to an ordinary middle-income employee; but anything above that would still be making a dent to an ordinary employees simple lifestyle, and would probably require some help maybe a bank loan to finance such a major investment. A bank loan on the balance of the amount for the property, unfortunately, bloats because on top of the interest there are other charges; this is precisely what makes the lending business so attractive to banks. To avoid having to pay these ominous charges, most buyers resort to looking for properties that offer owner financing.

The classified ads and some specialized websites offer real estate properties up for sale on an owner-financed basis. These are easy to spot as they would usually have the words owner-financed, owner will carry, seller financing or seller carry-back financing attached to the advertisement. What these phrases explicitly tell the buyer is that the owner/seller is willing to shoulder part of the amount they are asking for the property.

For the buyer, availing of owner financing is really a very inviting and simple alternative to going to the bank or any other lending institution for a loan. Before the seller accepts the buyers earnest money and/or down payment, there will be a credit investigation (or CI, for short) to check the buyers paying capability for the balance. If the buyer could give the seller a proof of employment record that says he has a stable job and he is in good credit standing, the seller will have confidence that there is a big chance there will be no default on the loan.

When the seller is assured of the integrity of the buyer, the seller would willingly take the offered down payment from the buyer, and then both will draw a contract for an owner-financing for the monthly mortgage payment. This way, the buyer wins because, even with a bigger interest slapped on the principal loan, monthly payment would be more lenient and affordable than the rigid ones imposed by banks. On the other hand, the seller also wins because his property is finally sold sooner and he does not have to put up the for-sale sign and wait any longer; he could impose a higher interest rate on the balance, and he does not have to pay government taxes already on a sale that has not been closed or fully paid.