What is a seller held trust?

A seller-held trust is a financial arrangement where the seller of a property or asset retains a trust to hold the proceeds from the sale until certain conditions are met. This setup can provide security for both parties, ensuring that the seller receives payment while protecting the buyer's interests during the transition. Typically, the trust is managed by a third party, and the terms are outlined in a legal agreement. It is commonly used in real estate transactions and business sales to facilitate smoother transfers and mitigate risks.