What is called when the seller finances the sale and transfers the property to the buyer at closing?

The process described occurs when the seller provides financing for the buyer to purchase the property, allowing the buyer to pay for the property over time rather than the buyer needing to secure a loan from a traditional lender. This arrangement is referred to as a purchase money mortgage. In this scenario, the seller essentially becomes the lender, and the mortgage is created simultaneously with the property transfer at closing, facilitating the sale by helping the buyer finance the transaction.

This type of financing can be beneficial for both parties; the seller may receive a steady income from the interest on the loan, and the buyer can purchase the property without needing to go through a conventional mortgage process. In contrast, the other options pertain to different financing situations, such as existing loans or specific types of mortgages that do not involve direct financing from the seller at the time of property transfer.