What does owner financing entail?

Owner financing is a method where the seller of a property provides an opportunity for the buyer to finance the purchase directly through them, rather than relying on traditional bank financing. In the context of this question, the correct choice indicates that the seller provides credit for a portion of the funds necessary to complete the sale.

This arrangement allows the buyer to avoid some of the stringent requirements that might be associated with bank loans, making the purchase more accessible. The seller might hold a note against the property and receive payments directly from the buyer, sometimes making it easier for both parties to negotiate terms that are mutually beneficial.

In contrast, other options do not accurately represent owner financing. For instance, stating that the buyer must obtain a bank loan only limits financing options, while indicating that the seller offers to finance the whole purchase price doesn't acknowledge that part of the payment can still come from a bank loan, which is not characteristic of owner financing as specified. Furthermore, suggesting that the buyer pays the listing fee directly to the seller does not relate to financing the property itself.

Overall, understanding owner financing in this context highlights how it can facilitate transactions by allowing sellers to offer flexible terms that fit the buyer's needs.