This was mentioned in another thread but I wanted to understand how this works. Can someone explain it to me? I have some family members trying to sell a place they inherited decades ago and this might get be beneficial. Thanks in advance!

It does not reduce capital gains, it defers them. Instead of receiving all of the proceeds of the sale in one year, you can spread out the proceeds and therefore the tax liability over several years. You can also earn interest on the portion financed, so that is additional income, but after you factor in taxes on the interest (taxed as ordinary income), inflation, and the time value of money, you need a pretty high interest rate to come out ahead. So the real benefit is just spreading out the tax liability over several years.

Even a 1031 is still just a deferral of capital gains. Unless you can defer until you die and someone can then get a step-up basis.