The seller of the house that I want to buy says that he will do a seller held 2nd mortgage. How does that work?
just like a 2nd to the bank. you give him a subordinate deed and a promissory note, then make payments to him.
Since you maybe buying with the seller carrying a 2nd, i would HIGHLY recommend you contact a real estate attorney to have them either draw up the seller 2nd contract or review the contract to protect yourself.
Do not take the sellers word the contract is right. You need to be protected by a third independant party that you higher.