The real estate market has undergone a tremendous amount of change in past years with more and more affordable financial solutions emerging such as the one offered by the seller financier. With the strict lending criteria more and more people are finding it difficult to access funds to finance to own homes. The seller finance is gaining popularity in Australia as an effective alternative way to finance homes. Those who approach the seller financier are people who may not be able to realize the dream of owning a house otherwise.  Those with poor credit history, who are not salaried employees or with casual or part-time jobs, those with a small or no deposit, who are new arrivals in Australia or those with bankruptcy or divorce usually do not qualify for traditional financing. They look for alternative ways to finance their home ownership as they are confident of paying off their homes with their earnings and savings cannot show proof.  Private lenders and real estate investors look for such people to get in to a seller financier contract.  These are the reasons why many are turned down by banks and traditional lenders. On the other hand many home owners want to sell their home fast which they otherwise may not be able to sell in the conventional way.  

Seller financiers and home buyers stand to benefit in this affordable solution to property ownership.  Sellers may have to wait for long to realize the entire amount for the sale of his property but he may not be able to sell it otherwise in the market. The seller financier collects a higher rate of interest from the buyer than what he pays for the home.  He also sells it for a higher price and profits.  The buyer gets to own the house in future which he lives at a price agreed upon which will not change till the expiry of the contract. The purchaser pays a low deposit or no deposit, enters into a contract. He moves in immediately after signing the contract and starts paying rent as well as an additional payment called rent premium which goes towards the purchase of the property.  He can make improvements and modifications to the house. The buyer while making payments builds equity in the house and also pays towards owning the house. The higher payments therefore are justified as they help the buyer to build assets. Normal renting does not contribute towards your future.

The seller financier arrangement is known by different names because of the different terms and norms of the contracts.  They are instalment finance, vendor finance and rent to buy.  These are affordable property solutions that benefit both the seller and the buyer and are completely legal.  The parties concerned should get a licensed professional or a solicitor to go through the terms and understand them clearly before signing the agreement. The higher rates of payment and different set of terms make it a risky proposition for the buyer, while the seller should make sure that he gets regular payments. The seller financier system is both risky and beneficial and calls for extreme caution and back up financial arrangements.