In a seller-financed transaction, the seller acts as the:
Correct Answer
B) Lender, holding the promissory note and deed of trust
In a seller-financed transaction, the seller extends credit directly to the buyer instead of the buyer obtaining a loan from a bank or mortgage company. The buyer signs a promissory note agreeing to repay the seller, and the loan is typically secured by a deed of trust on the property. In Montana, deeds of trust are the standard security instrument. The seller essentially steps into the role of lender, receiving monthly payments (including principal and interest) from the buyer over the agreed loan term.
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