Real Estate Council of Alberta Fundamentals Practice Exam

What is a common tactic used by sellers in a seller financing scheme?

1. Offering low interest rates to all buyers

2. Targeting potential buyers with little or no credit

3. Providing property warranties

4. Conducting extensive buyer background checks

The correct answer is: Targeting potential buyers with little or no credit

In a seller financing scheme, sellers often aim to facilitate the sale of their property by offering financing options directly to buyers. Targeting potential buyers with little or no credit is a common tactic because these buyers may struggle to secure traditional financing through banks or mortgage lenders. By offering seller financing, the seller opens the door for these buyers who might otherwise be excluded from the housing market. This approach can benefit sellers by expanding the pool of interested buyers and potentially allowing for a quicker sale, as it removes some of the barriers that conventional financing imposes. Additionally, sellers can negotiate terms that are favorable to them, such as higher interest rates or down payments, while also providing a solution for buyers who are willing to take on a riskier financial arrangement due to their credit circumstances. While offering low interest rates, providing property warranties, and conducting buyer background checks are all relevant actions sellers may take in various transactions, they do not specifically align with the unique motivations and strategies associated with seller financing.