13. Seller Financing
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Questions and Answers

In a lease/option, the buyer leases the property for a period of time and may choose to buy it at a specified price during the lease term.

True

A purchase money loan is when the buyer gives a noncash asset to the seller in exchange for a reduced sales price.

False

Seller financing isn't an option for a seller who needs to be cashed out immediately.

True

If a seller offers financing with an interest rate far below market rates, the IRS will treat a portion of the principal received each year as interest.

<p>True</p> Signup and view all the answers

A seller second may be used to supplement either a new loan from an institutional lender or an assumption of an existing loan.

<p>True</p> Signup and view all the answers

A seller who needs some cash at closing may offer primary financing in conjunction with a supplemental institutional loan.

<p>True</p> Signup and view all the answers

A purchase money loan involves the seller paying discount points to the lender on behalf of the buyer.

<p>False</p> Signup and view all the answers

If the buyer pays the seller in installments over several years, part of the taxes can be deferred by the seller.

<p>True</p> Signup and view all the answers

Seller financing can be used by a seller who needs all of their net equity immediately to buy another house.

<p>False</p> Signup and view all the answers

A seller who needs some cash for a small downpayment on another property may choose primary financing along with supplemental institutional loan.

<p>True</p> Signup and view all the answers

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