Buying a Home on an Instalment Sale Basis

Buying a property on an instalment sale agreement basis can prove to be a win-win for buyers and sellers.

Sellers often battle to achieve their price, and buyers such as the self-employed, are often left frustrated when applying for a bond through the normal channels. Provided the buyer can come up with a substantial deposit, deals can be structured on the basis that the purchase price is paid off over a period of time, say 5 years, with the option to apply for a mortgage loan at any point in time during that period.

The seller is protected as he or she would retain ownership of the property, and the buyer is protected as the contract of sale is endorsed against the title deeds of the property, making it impossible for a seller to dispose of, or mortgage the property whilst such contract remains in place.

The deposit is released to the seller once the contract has been endorsed in the Deeds Office, and the monthly instalments as well as occupational rental are paid to the seller directly. Once the full purchase price has been paid or secured, the transfer of the property takes place.

Should you require more information on the structuring of such transactions please contact reception@amchunter.co.za