Reread the prior chapter on financials. It is not enough to simply agree that the seller will hold the financing in some amount. You must also include in your contract the most common terms any borrower and lender would negotiate. At a minimum, you should spell out the interest rate, the term of the loan, how often payments must be made, the amount of the payments, and that the property will stand as security for the loan. If you are buying the property in the name of a corporation or a limited liability company, the seller might want to include something that requires your personal guarantee for the loan. If not, you should not volunteer to guarantee the loan.
In the contract, give yourself time to review the formal note and mortgage or deed of trust after they are prepared. The worst thing you can do is have a short deadline for closing, such as thirty days, and spend the whole time haggling over details of the note and mortgage. When day number thirty comes and goes, you will be in default and the seller could cancel the contract.
Avoid that problem by including a contingency such as the following: “Buyer and Seller will have twenty-one days after contract signing to agree on the exact wording of the note and security documents to be executed at closing. If they are unable to agree by that time, Buyer may extend the closing date an additional twenty-one days in order to secure third-party financing, or Buyer may cancel the contract and receive a refund of the earnest money, or the parties may negotiate for an extension of the closing date, but with all other contract terms and conditions the same.” With this language, you at least have a Plan B in case everything falls apart over technicalities of the seller financing.