Wealthy Home Sellers Are Making Risky Offers to Drum up Buyer Interest

Carson Austin began to worry after his home had been sitting on the market for a couple of months with barely any interest from potential buyers.

It was early 2025, and he had listed the 4,600-square-foot Georgetown, Texas, property for $1.6 million, which he thought was a competitive price, comparable to other large homes in the area. But mortgage rates were hovering around 7%, keeping buyers out of the market and sales stagnant.

So Austin decided to try something a bit unconventional. He offered seller financing — an agreement in which the seller acts as the lender, typically providing the buyer with a short-term home loan. In Austin’s case, he held firm on the home’s sale price, but offered a below-market interest rate to entice buyers.

As soon as he offered the creative financing option, interest picked up. Within two days, the house was under contract with a buyer who agreed to a 35% down payment and a six-year seller-financed loan with a 4% interest rate. The sale closed just days later. Austin worked with a firm, MORE Seller Financing, to facilitate the deal, vetting and approving the buyer, and structuring the transaction with the help of lawyers and other specialists.

Austin said his buyer only came to see his house because of the below-market interest rate.

“I 100% know that the only reason that house sold, especially in that timeframe, was the owner financing — they told us that,” he said.

Seller or owner financing gained popularity in the 1970s and 1980s, when interest rates were sky-high, but it developed a bad reputation for lacking sufficient protections, particularly for buyers. Federal regulators have criticized the model for exploiting low-income buyers with high interest rates on low-quality homes in poor neighborhoods.

However, as mortgage rates have soared since 2022, the creative financing strategy has regained popularity, despite remaining a niche offering. The practice is increasingly common in higher-end home sales, according to Realtor.com. Sales involving seller financing grew by 8% in dollar volume to more than $30 billion between 2023 and 2024, according to Note Investor.

“This used to be kind of a sketchy thing that happened with really cheap properties and really under-qualified buyers, and now the median price is on par with what’s on the market as a whole,” said Joel Berner, a senior economist at Realtor.com. “So it’s moving upmarket, becoming more widespread, happening on higher dollar properties.”