Common Financing Terms When Selling a House

Understanding financing helps FSBO sellers compare offers confidently. Here’s what cash, conventional, FHA/VA, and seller financing really mean for your sale.

💵 Cash Offers

Cash buyers skip lender underwriting, so closings are often faster and simpler.

  • Pros: Fewer contingencies, quicker close, lower fall-through risk.
  • Consider: Cash buyers may expect a price discount for speed/certainty.

🏦 Conventional Loans

The most common financing. Appraisal and underwriting apply, but property condition standards are usually flexible.

  • Down payment: Often 5%–20%+; stronger down payments can signal a more reliable close.
  • Appraisal: If value comes in low, expect renegotiation or concessions.
  • Timing: Typical closes in ~30 days; ask for lender pre-approval letters.

🛡️ FHA & VA Financing

Government-backed loans help buyers with lower down payments but may require stricter property conditions.

  • FHA: Minimum property standards; common repair flags include peeling paint, handrails, GFCIs.
  • VA: Similar safety/condition checks; appraisal can be conservative.
  • Concessions: Know lender caps. See our guide to seller concessions.

✍️ Seller Financing (Owner Carry)

The seller acts as the lender and the buyer pays you over time. Useful when buyers can’t obtain traditional financing quickly.

  • Pros: Wider buyer pool, potential for interest income.
  • Cons: Risk of default; you’ll need a promissory note, security instrument, and clear terms.
  • Tip: Consult a real estate attorney and consider a third-party loan servicer.

📄 Key Terms That Affect Your Net

  • Appraisal contingency: If value is low, buyer may request price cuts or concessions.
  • Financing contingency: Buyer can exit if loan is denied within contingency period.
  • Closing costs: Clarify who pays what; credits reduce your proceeds.
  • Rate buydowns: Buyer may ask you to pay discount points to lower their rate.

💡 Pro Tip: Exposure Brings Better Offers

To see more cash, conventional, FHA, and VA buyers, you need MLS visibility. Listing with Brokerless syndicates your home to Realtor.com, Zillow, and your local MLS search.

New to MLS? See how listing on the MLS with Brokerless works or compare flat fee MLS plans.

🔑 Bottom Line

Know the financing behind each offer, not just the price. With MLS exposure and a clear understanding of terms, FSBO sellers can choose the strongest path to closing.