In a seller-financed transaction, the seller acts as the:
Correct Answer
B) Lender, holding the promissory note and retaining a security interest in the property
In seller financing, the seller extends credit directly to the buyer rather than requiring the buyer to obtain a loan from an institutional lender. The seller holds the promissory note as evidence of the debt and typically retains a deed of trust or mortgage on the property as security. If the buyer defaults, the seller has the right to foreclose. This arrangement is common when buyers cannot qualify for conventional financing or when sellers want to generate installment income.
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