In seller financing, which party holds the security interest in the property until paid in full?

In seller financing, the seller typically retains a security interest in the property until the buyer has fully paid for it. This arrangement occurs when the seller allows the buyer to purchase the property with financing directly from them, rather than from a traditional lender.

In this scenario, the seller acts as the lender and holds a promissory note that details the terms of the financing arrangement, including the repayment schedule. Until the buyer meets the terms of this note and pays off the total purchase price, the seller maintains a security interest in the property, usually in the form of a lien. This security interest gives the seller the right to take back the property if the buyer defaults on the payment obligations.

The other options do not accurately reflect the dynamics of seller financing. The borrower, typically the buyer, does not hold a security interest; instead, they are the party receiving the loan from the seller. The lender, in a conventional sense, would refer to a financial institution, which is not applicable in this context since the seller is acting as the financier. An appraiser's role is to assess property value and does not involve holding interest in the financing arrangement.