Q: What does it mean when a listing says a seller is willing to "carry back paper"?

A: Seller Carry Back, Owner Will Carry, OWC. A Seller Carry is a Seller Loan.
All of the above terms indicate that the seller is willing to assist in the financing of the property for the buyer by not requiring all of the seller's equity in cash when the purchase closes. This is usually done in the form of a Second or Third Loan, secured by the remaining equity in the property using a security device such as a mortgage or trust deed. If a seller owns a property "free and clear," a seller carry back could be a First Loan.
Example:Buyer contracts to buy a home for $100,000. Buyer will put $10,000 down, get a new loan in the amount of $80,000 and the seller will "Carry" the remaining $10,000 in equity in the form of a note and deed of trust payable monthly, Interest Only at 10% for 5 years, all due and payable at the end of 5 years.

Purchase Price:
$100,000
New Loan:
$80,000
Down Payment:
$10,000

Seller gets the $80,000 from the new loan, and the $10,000 down payment and takes interest on the remaining $10,000 for 5 years at which time the seller receives from the buyer the last $10,000.