Ways to Protect Yourself Under Seller Financing
TIP: Instead of taking back an installment loan, per se, have the buyer purchase an annuity or some zero-coupon bonds in your name. These can often be bought at deep discounts to eventual payout, lowering the sale price, but guaranteeing you a higher future return. —BizFilings' Business Owner’s Toolkit
If you take back seller financing, try to have the buyer provide some or all of the following:
- Additional security for the loan. For example, require the buyer to put up a personal residence as additional collateral.
- The right to audit the company’s financial statement and business plan during the years of the loan payout.
- A life insurance policy on the buyer’s life with you as the beneficiary until the loan is paid off.
Notice: The information on this page may not be current. The archive is a collection of content previously published on one or more NAR web properties. Archive pages are not updated and may no longer be accurate. Users must independently verify the accuracy and currency of the information found here. The National Association of REALTORS® disclaims all liability for any loss or injury resulting from the use of the information or data found on this page.