What must sellers do as a protective measure when they lend part of the purchase price?

When sellers lend part of the purchase price, it is essential for them to secure the debt with a deed of trust or a mortgage. By doing this, they create a legal framework that protects their interest in the property. This means that if the buyer fails to fulfill their payment obligations, the seller has the right to foreclose on the property, similar to how a bank would operate if it had a mortgage on the property.

Securing the loan ensures that the seller's financial stake in the property is protected, allowing them to recover their investment should issues arise. Without such security, the seller would have no formal claim against the property, making it significantly riskier to lend money as part of the transaction.

In contrast, using a simple sales contract does not provide the necessary legal backing to secure the debt. Similarly, obtaining a mortgage from a bank may not be relevant if the seller is lending directly. Requesting an expedited closing might expedite the process but does not address the need for security on the loan itself. Thus, securing the debt through appropriate legal instruments is a critical step in protecting the financial interests of the seller.