A seller carryback (or carryback loan) is when you, the seller, 'carry back' some or all of the purchase price as a loan to the buyer instead of receiving that money in cash at closing. ClozeEZ lists the home and generates the Arizona purchase contract; the note and deed of trust come from an Arizona attorney, and a licensed title company records them. The buyer signs a note and pays you monthly, with interest, so your home sale becomes a stream of income. Carrybacks can finance the whole price or just fill a gap: for example, covering a buyer's shortfall so a deal that would otherwise fall apart can close. Done right, it earns you interest and widens your buyer pool; done carelessly, it exposes you to default, so the note must be secured and professionally drafted.
People use 'seller carryback,' 'seller carry,' and 'owner financing' loosely, but there's a useful distinction. Full owner financing means you finance the entire price (minus the down payment). A carryback often means you finance only part of it: the buyer brings a bank loan or a big down payment, and you carry the remaining slice. Both use the same tools: a promissory note for the debt and a deed of trust to secure it against the home.
The appeal of a carryback is simple: a paid-off house that would hand you a lump sum instead pays you monthly, with interest, for years. For a seller who doesn't need all the cash at once, that can beat parking the proceeds in a low-yield account, and it can smooth out the tax bill.
Say you're selling a paid-off home for $450,000. The buyer puts 15% down ($67,500) and you carry the remaining $382,500 at 7% interest, amortized over 30 years, with a 5-year balloon.
Illustrative full carryback on a $450,000 sale
| Item | Amount |
|---|---|
| Sale price | $450,000 |
| Down payment at closing (15%) | $67,500 |
| Amount you carry (the note) | $382,500 |
| Rate / amortization | 7% over 30 years |
| Approx. monthly payment to you | ~$2,545 principal + interest |
| Balloon | Remaining balance due in year 5 |
You collect the down payment now, roughly $2,545 a month for five years, and then the buyer refinances or sells and pays off the balance, cashing you out. The numbers are illustrative; your rate, term, and balloon are whatever you and the buyer agree to. A loan servicer can generate the exact amortization schedule.
A carryback is a financial product you're issuing, so treat it like one: vet the borrower, secure the collateral, document everything, and keep clean records. That discipline is what turns a carryback from a risk into reliable income.
It's a loan you make to your buyer for part or all of the purchase price instead of receiving that money in cash at closing. The buyer signs a promissory note and pays you monthly with interest, and the debt is secured by a deed of trust on the home so you can foreclose if they default.
Yes, that's a partial carry, or a 'second.' The bank holds the first loan and you carry a smaller amount behind it. It earns a higher rate but you're repaid after the bank if the loan goes bad, so price that risk in and have an attorney confirm the lien positions and any lender approvals needed.
Often it's treated as an installment sale, which can spread your capital-gains recognition across the years you collect payments rather than all in the year of sale, while the interest you receive is taxed as ordinary income. The details depend on your basis and situation; confirm with a CPA.
Because the note is secured by a deed of trust, you can pursue Arizona's trustee's-sale process to recover the home and keep the down payment and payments already made. A solid down payment, a vetted buyer, and proper documentation are your best protection; have an attorney confirm the process for your specific note.
List your Arizona home free on ClozeEZ. A flat $200 Platform Success Fee is owed only if your home closes: no close, no fee, no percentage.
Informational only, not legal or financial advice. ClozeEZ is a software platform, not a real estate broker or law firm. Consult an Arizona attorney for legal questions specific to your sale.