Banks wouldn’t give an interest free loan, but we’re talking about an owner who is weighing giving a 0% interest-free loan against his other obligations and risks associated with that house. I am guessing that this house is not the prettiest house on the block (360k houses in SD usually aren’t), and this move opens him up to a bigger buyer pool, reducing his risk of not selling significantly.
From a buyer’s perspective, I don’t think this makes a difference on decision to resell. The profit (or loss) from the house stays the same, and he/she pays off all the liens just as in any sale.
I see the biggest risk the seller is taking is what happens if the house forecloses–where does he stand in such an event? But liability to the bank–180 or less–is not as likely to be foreclosed on.
