Little or no qualifying. The seller’s interpretation of buyer qualifications is typically less stringent and more flexible than those imposed by conventional lenders.

Tailored financing. Unlike conventional loans, sellers and buyers can choose from a variety of loan repayment options, such as interest-only, fixed-rate amortization, less-than-interest, or a balloon payment (if the state allows it), or even a combination of these. Interest rates can adjust periodically or remain at one rate for the term of the loan.

Down payment flexibility. Down payments are negotiable. If a seller wants a larger down payment than the buyer possesses, sometimes sellers will let a buyer make periodic lump-sum payments toward a down payment.

Lower closing costs. Without an institutional lender, there are no loan or discount points, and no origination fees, processing fees, administration fees, or any of the other assorted miscellaneous fees that lenders routinely charge, which automatically saves money on buyer closing costs.

Faster possession. Because buyers and sellers aren’t waiting for a lender to process the financing, buyers can close faster and get possession of the property sooner than with a conventional loan transaction.