“I’ve seen the phrase “owner will carry” in a couple of real estate ads. What does that mean?”
It means that if you buy a property, the seller acts like a bank and loans you part of their proceeds for a first or second loan on the property.
For example, your banker tells you that you can get a good 80% first loan, but you only have 10% to put down. You propose to the seller that the bank loans 80%, the seller loans you 10%, and you put 10% down. This is called an “80-10-10.”
Good news, bad news…
Good news: sellers typically charge attractive rates and don’t charge points.
Bad news: few sellers will “carry” and they usually expect you to pay a small premium for the property in return.