Homebuyers who have problem credit or who can't raise a required down payment may buy a home using seller financing, sometimes called a land contract.

The seller-- not a bank-- may carry the note on the property. Terms are often much more liberal than a conventional bank loan. If the buyer defaults on the note then the seller takes the property back.

Seller financing is an ideal solution for the owner of property that hasn't sold using conventional means. If the seller needs the lump sum rather than payments he may then "cash out" by selling the note to a third party.