Do sellers of homes need a down payment if...

[sco_101]

...I am obtaining a mortgage from a lender who also wants money down? I am searching for a home to buy, and I see that most sellers want a down payment. If I take out a mortgage loan, won't they be paid off by it?

[sapphireskies72]

Yes, when you take out a mortgage to purchase a house, the proceeds of same go to the Seller as their profit. But, generally you only finance 80% of the asking price. The other %20 is held in escrow by the Seller's attorney as they need money down to ensure you are not "pulling their chain" and have a point or recourse should you default under certain aspects of the signed contract.