Who Holds Title in Seller Financing?


Are you wondering who holds title in seller financing? It doesn’t have to be confusing. Ted Thomas explains seller financing and how you can mitigate your risk!

I’m Ted Thomas, and today I’ll answer your question, “Who holds title in seller financing?” 

For the last 30 years, I’ve been involved in the alternative category of tax liens and tax deeds in real estate.  The business is called alternative because it’s different.  It’s been around for hundreds of years, but most schools and institutions do not teach the public about tax liens or tax deeds

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My first response is that this is a very important subject because it reveals a lot about who is asking the question.  The person asking the question is a serious investor who’s concerned about risk.

What are the risks of seller financing? Before I get into the nitty gritty, I want to mention that business is a risky proposition, and there’s good risk and bad risk. 

Entrepreneurs must learn to avoid risk.  Risk avoidance should always be a priority. 

I once read a quote from a famous stock market investor, Warren Buffet.  This guy made billions with stocks.  His advice was Rule #1 don’t lose money. Rule #2 refer to rule #1. 

So who holds, meaning who retains, the title in seller financing?  This is an important question to understand.  The simple answer is if you are a seller and you want to be a lender, you must hold title. 

who holds title in seller financing 2


You will have a written contract. The contract will outline the principle of the loan, the interest on the loan, and the long term or short term that installment sales provide. 

Using a land contract, or a contract for deed, sellers usually document the complete financial process.  

You don’t know what you don’t know.  Title companies and attorneys will have contracts.  By law, all real estate bought or sold requires written documents.

Buyers and sellers, basically everyone, hates to read contracts. This is devastating if things go wrong, like for example, if the buyer refuses to pay the installment payments, or is negligent with maintaining the property, or doesn’t pay the taxes. 


Before I go into details of seller financing and title issues, I’m not an attorney, a CPA or a real estate broker.  I’m an author, investor, publisher, teacher and guide. 

My first advice is you do not want to take advice from people who have not already been successful.  Attorneys and title companies have experience. Financial matters require you to talk, discuss, and take advice from those who are trained to help you.  

On a different subject, in my 3-day workshop, I always take a moment to briefly explain information l learned from the SBA, Small Business Administration.  This is an agency of the federal government.

The mission statement for the SBA explains that it’s mandated to help small businesses, and one of the many ways they help is they lend money. The SBA also will reveal information about who is successful in business and who isn’t successful.

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I’ll keep this short.  According to the Small Business Administration, risk is high when starting a business. 

For example, for every thousand new businesses, let’s call them startups, at the end of 5 years, 80% will have failed; only 20% will survive.  If we do the math, 200 have survived, and an astonishing 80% have failed. 

The SBA goes further to explain that of the 200 survivors, only 20% of those survivors will ultimately survive. So, let’s repeat, only 200 survivors and 20% of the 200 will be the last survivors.  That is, 40 survivors.

Wow! That means it works out that 96% will fail, and only 4% will survive. 

If you want to know the answer, the SBA will tell us, the answer is simple.

Most entrepreneurs don’t understand marketing, financing, or the importance of sales.  Additionally, most entrepreneurs don’t hire or take advice from experts, mentors, guides or coaches.  They just move ahead and pray it’s going to work out.  


tax defaulted propertiesNow let’s go back and answer your question, “Who holds title in seller financing?”  

My student investors learn to buy at government controlled and mandated tax defaulted property auctions.  They purchase at substantial discounts, 60%, 70%, and 80%. 

The students attract buyers for those used and abused properties by advertising low prices and using seller financing.

Why does all this work?  

Every property in the United States has a property tax.  Taxes are levied and collected every year.  The county treasurer is authorized by the state legislature to levy taxes, collect taxes, and if they are uncollectible, to seize the property and resell the property at auction.

The board of supervisors or county commissioners will mandate the treasurer/tax collector seize unpaid properties, resell the properties at auction, and use the revenue to pay delinquent tax bills. 


Bidders purchase these properties with no mortgage for low prices of 10 cents, 20 cents, or 30 cents on the dollar.  

These are unwanted properties. The county does not want these delinquent properties.  The county wants as many properties as possible on the honorable tax roll where they collect annual income.  

Savvy investors learn the process and purchase auction property with no mortgage for pennies on the dollar.  Many of the properties are used and abused. Some have been abandoned. 


The purchase prices could be exceptionally low.  Auction prices could also be low depending upon who is present at the auction.  

Auctions take place on the courthouse steps or at large population counties in large pavilions at the county fairgrounds.  There could be hundreds of attendees. 


Buyers who are successful understand the importance of multiple selling strategies, not just a sign on the front lawn.

Who holds title in seller financing? Is owner financing safe for the seller? To protect your asset, I recommend the seller retain the deed (title) to the property. 

Seller financing simply means the seller is the banker.  The seller is looking for revenue and will require a low down payment and installments for a specific period into the future.  

Seller financing is an alternative for credit-challenged people who have been poor managers and are victims of low credit scores. These buyers have a number of challenges, including bankruptcy, family illness, or loss of jobs. This is a significant part of the marketplace.

Sellers who are willing to act as bankers will find this market lucrative; however they must evaluate who they are selling to and for how long they are willing to finance.

To answer the question, “Who holds title in seller financing?” sellers protect their assets by retaining title. 


We hope you enjoyed Ted’s lesson, “Who Holds Title in Seller Financing?”

Whenever you start a new business, you want to mitigate your risk, and that includes the business of real estate investment.

Only about 4% of new businesses ultimately survive. That’s why it’s important to know what you’re doing and be careful who advises you. Learn from experts who are experienced and successful.

Purchasing tax defaulted property reduces your risk because at tax sale auctions, you can buy properties for pennies on the dollar, and you get the property without a mortgage. This leaves you with a sizeable profit margin.

Once you’ve purchased a property at a tax sale, you have multiple selling strategies to choose from. One strategy is seller financing, which means that you act as the banker. You draw up the contract and set the terms, including the down payment, monthly installment payments, and interest rate you will receive.

Most people who will be interested in your offer will have adequate income but a poor credit score. So in order to reduce your risk, who holds title in seller financing? You, the seller, should!

If you’d like to learn more about investing in bargain real estate, there’s no one more qualified to teach you than Ted Thomas, America’s leading authority on tax lien certificates and tax defaulted property investing.

Ted Thomas is the only one who provides full support and complete training with home study courses, Q&A webinars, live tutorials, workshops & web classes, and personal one-on-one coaching.

Ted Thomas classGet started today at no cost and learn how to start investing with Ted’s FREE Master Class, that reveals the incredible opportunities available in tax defaulted real estate. The class is only about 1 hour of streaming video and contains life-changing information! You can’t afford to miss it!

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Ted Thomas

Ted Thomas is America’s Leading Authority on Tax Lien Certificates and Tax Deed Auctions, as well as a publisher and author of more than 30 books. His guidebooks on Real Estate have sold in four corners of the world. He has been teaching people just like you for over 30 years how to buy houses in good neighborhoods for pennies on the dollar. He teaches how to create wealth with minimum risk and easy-to-learn methods.

The Ted Thomas Difference:

  • Ted is recognized as America’s Tax Lien Certificate & Tax Deed Authority and has been helping people with investing in tax defaulted properties for over 30 years.
  • Ted has built a team of certified coaches that have 70 combined years of auction experience and are available to his students by phone to guide and mentor you to avoid getting overwhelmed or worse, losing money
  • Ted has ironclad PROOF that what he is teaching you does work. With hundreds of successful students providing testimonials and a 4.9 Google rating which is unheard of in this industry.
  • Ted and his staff don’t hide behind a website; they can be reached during office hours at 321-449-9940.

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