Instead of one payment at closing, you collect monthly, secured by the house you just sold.
Before tax. Interest income is taxed differently from a lump sum, which is worth an hour with your accountant before you decide.
A cash buyer is paying for speed and certainty, and that discount is real. When you finance it instead, we are not asking you to absorb that discount, so the price starts at or above what the house is worth today.
You are the lender now. If the payments stop, you foreclose and take the house back, which is a real process with real cost. The note is secured by the property, so you are not unsecured, but you are exposed to time.
Owners who do not need the whole amount at once and would rather have monthly income than a lump sum. It is usually the wrong structure if you need the proceeds to buy something else immediately.
A promissory note and a deed of trust, drawn by a closing attorney and recorded at the county. You keep a lien on the property until the note is paid.
Have your own attorney read it. This page explains a structure, it is not legal or tax advice, and the difference matters here more than on most pages.