It generally means the property is owned free and clear. When they are the ones approving the mortgage, closings can take place in days instead of weeks. Less expenses to the buyer so can get a higher price. Greater flexibility with financing. Can ask for and get top dollar for property.
Seller can sell the mortgage for cash, often at closing.
They can advertise their mortgage for sale here. Installment sale tax treatment on investment properties. The property has been on the market so long that you are about to lose the listing The buyer does not have enough cash for a full down payment. You close a deal that would have fallen apart, and put extra commission dollars in your pocket. The second mortgage created here is saleable for cash.