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Wonderful isn’t it? To know that you can buy a property in any market condition, at any time, and you do not need a mortgage bond or all the cash up front.
That would be a dream in certain cases, wouldn’t it? Well, we are here to tell you that this option is not a dream but a reality. It was always available, but rarely known or fully understood.
Purchasing property, as you know, can be purchased with cash, or with a bond or with an installment sale which some time is called buying property on installments.
The truth is that installment sales are an excellent strategy both for home ownership and investment. That said, the problem is that an installment sale is the least understood form of selling and buying a property.
Let’s see why an installment sale would be so good in certain cases, why and when one would use this option.
Why would a purchaser want to buy a property on an installment sale:
- When one does not have money to pay for the transfer duties,
but will in the next 6 months, or earlier, but wants to close the deal
right now.
- When one does not want further immediate exposure with the banks or in the next 5 years.
- When one wants to buy lots of property without issues of over exposure to the banks.
- When
one cannot get a bond from the bank but can buy a property and pay the
monthly repayments just the same and will most likely be able to get a
bond in the next 5 years.
Why would one sell a property in an installment sale:
- When one cannot achieve the price they wish right now but need to sell right now.
- When one needs to sell quickly but can’t find a qualified buyer due to market circumstances for whatever reason.
- When
one needs to sell and leave the house, but the market price is nowhere
near the bond or it is not market related right now but will be in the
future.
- When one is over exposed and can’t pay the bonds and can’t sell the property because the market is depressed.
- When one over financed and can’t get the right price right now to cover the bond.
- When
one is over exposed and one can’t sell the property because it was
incorrectly purchased, at a high price, and now one would need to get
out of the property before the prices increase enough to get right
price.
- When the market is depressed and the purchasers can’t
get the bonds they need right now from the banks but would be able to
in the future and can pay the equivalent of the mortgage repayments.
These are just some examples when and where an installment sale could
be of great benefit. Installment sales are for all market conditions
and they need to be crafted to bring a win-win deal for the seller and
the buyer. If this can be achieved then an installment sale can even
avoid repossession.
In truth, if installment sales were better understood and more often
utilized by estate agents and other people in the market, there should
never be a repossession or very rarely.
That said, installment sales are not for everyone, and extensive
knowledge is required to put together a good installment sale without
pitfalls.
Because installment sales are not as simple as a straight forward
Offer to Purchase, many estate agents and property investors avoid it.
They don’t know how to sell it as a solution or simply don’t even know
how to consider it and offer it as a solution.
If you are a property investor or estate agent, now you can learn
more about Installment Sales to use this as a solution to closing more
deals or buying more property when there seems to be no solution to the
situation.
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