A promissory note is the signed, written promise to repay a loan on stated terms, including the amount, interest rate, payment schedule and what happens on default. In a seller-financed sale, the buyer signs a note to the seller instead of, or alongside, a bank. The deed of trust that secures the note is a separate document tied to it.
Why it matters
The note is the actual IOU behind a seller-financed sale, and its terms decide what you can do if the buyer stops paying.