Owner Financing
What Owner Financing Actually Is
Owner financing — also called seller financing, a land contract, or a contract for deed — means the seller acts as the lender. In Washington, the same instrument is called a Real Estate Contract. Different names, same idea.
We own the houses we sell. So when you buy one from us on owner financing, there's no third party to satisfy. We set the terms with you directly, in writing, and you make your payments to us instead of to a bank.
At closing, you take possession and equitable title. You live in the home, you're responsible for it, and any appreciation belongs to you — every payment builds your position in the property. We retain legal title until the balance is paid in full. When you complete the payments, or refinance and pay off the balance early, legal title transfers to you and the contract is satisfied.
That structure is what allows us to sell to buyers a bank would decline. It's also why you should have your own attorney read the contract before you sign. We recommend that on every transaction, and we'll give you the documents with enough time to do it.
How It Works
- Get on the buyer list. Fill out the form or call. We'll ask about household income, what you have available for a down payment, and your timeline.
- We review your situation. We verify income and ability to pay. We're not pulling a score and rejecting you over it — we're confirming the payment fits your actual budget.
- You tour available homes. We'll show you what's in inventory that matches your budget and area.
- We agree on terms in writing. Purchase price, down payment, interest rate, monthly payment, and term length — all documented before anything is signed.
- Attorney review. Take the contract to your own attorney. We want you to.
- Close and move in. You get the keys and start building toward full ownership.
What You Need to Qualify
We look at four things:
- A down payment. This is the main one. Owner financing requires meaningful money down — it's what makes the deal work without a bank. Amounts vary by property and by which structure you qualify for.
- Verifiable income. Bank statements, 1099s, contracts, deposits — we work with how self-employed people actually get paid. We don't require two years of tax returns.
- A payment that fits your budget. We'll look at your total housing cost against your income. If it's too tight, that's a bad deal for both of us.
- No active bankruptcy. A discharged bankruptcy is fine — that's a large share of our buyers. An open, undischarged case is a complication we'd need to talk through.
What we don't require: a minimum credit score, two years of W-2 employment, or bank approval of any kind.
Two Ways We Structure It
Not every owner-financed deal looks the same. Which structure you get depends largely on how much you bring to closing.
Real Estate Contract (our standard)
Also called a contract for deed or land contract. This is how most of our transactions are written.
- You take possession and equitable title at closing
- We hold legal title until the balance is paid
- Lower down payment requirement
- Legal title transfers to you at payoff or refinance
Note and Deed of Trust (higher down payment)
For buyers bringing a larger down payment, we can sometimes write the deal as a promissory note secured by a deed of trust.
- You take legal title at closing — the deed is in your name from day one
- We hold a lien against the property, the same way a bank would
- Requires a substantially larger down payment
- Stronger position for you, which is why the cash requirement is higher
Owner Financing vs. a Conventional Mortgage
| Feature | Owner Financing | Conventional Mortgage |
|---|---|---|
| Who approves you | We do | An underwriter |
| Credit-score minimum | None | Typically 620+ |
| Self-employed income | Bank statements, 1099s, contracts | Two years of tax returns |
| Time from offer to keys | Days to weeks | 30–45 days |
| Bankruptcy waiting period | None | 2–4 years, depending on chapter and loan type |
| Foreclosure waiting period | None | 3–7 years, depending on loan type |
| Interest rate | Typically above market | Market rate |
| Closing costs | Lower | Lender fees, origination, points |
We'll be straight with you about the tradeoff: owner financing costs more than a bank loan. The rate is higher because we're carrying the risk a bank won't. If you can qualify for a conventional mortgage, take the mortgage — it's the cheaper product, and we'll refer you to our retail brokerage to help you find a home that way. Owner financing is for people who can't get that loan today. It's a bridge, not a bargain.
Who This Works For
Self-employed and 1099 earners
Contractors, tradespeople, gig workers, business owners, commission earners. Your income is real; it just doesn't fit the underwriting template.
Buyers past a bankruptcy or foreclosure
Conventional lenders impose mandatory waiting periods of two to seven years. We look at where you are today.
Buyers coming out of a divorce
A split can wreck a credit file and a balance sheet at the same time, even when your income never changed.
Thin or new credit files
Recent immigrants, younger buyers, and people who've lived debt-free and therefore have nothing for a bureau to score.
Your Responsibilities as an Owner-Financed Buyer
Under owner financing you're the one living in and responsible for the home. That generally means property taxes, insurance, maintenance, and repairs are yours.
You also need to make payments on time. Default on an owner-financed contract has real consequences, and depending on your state and your contract those may include forfeiture of the property and what you've paid into it. Your specific remedies and protections are spelled out in your agreement and vary by state.
None of that should scare you off — it's the same responsibility any homeowner carries. But you should walk in with clear eyes, and you should have an attorney confirm exactly what your contract says on default before you sign it.
Refinancing Out Later
Many of our buyers refinance into a conventional mortgage once their credit and income history support it. Nothing in our agreements prevents that. A stretch of on-time payments, a seasoned business, and a rebuilt credit file can put you in position to pay off the balance with a bank loan at a lower rate.
Common Questions
Is owner financing legal?
Yes. Seller financing is a long-established, legal way to transfer real estate. It's regulated at the federal level and by individual states, and we structure our transactions to comply. We encourage independent attorney review on every deal.
Can I sell the home before it's paid off?
This depends on your contract. Talk to us about your situation before you list anything.
What happens if I miss a payment?
Talk to us early — a call before you miss beats a call after. Your contract sets out the remedies, and those vary by state. This is exactly the kind of clause your attorney should walk you through.
What's a Real Estate Contract in Washington?
It's Washington's term for what other states call a contract for deed or land contract. You take possession and equitable title at closing and we hold legal title until the balance is paid off.
Can I get the deed in my name at closing?
Sometimes — with a larger down payment we can structure the deal as a note and deed of trust, which puts legal title in your name immediately and gives us a lien instead. Ask us what that would take on a property you're interested in.
How is this different from a lease option?
With a lease option you're a tenant with a right to buy. With owner financing you're a buyer in possession with equitable title, building toward outright ownership. See our Lease Option page for a full comparison.
This page is for general information only and isn't legal or financial advice. Every transaction is documented individually, and we recommend independent attorney review before you sign anything.
Ready to talk about owner financing?
Call or email us and we'll walk you through what it would take for your situation.