What is an Installment Sale Purchase?

By
Real Estate Broker/Owner with Dennis J. Zisa & Associates, Inc. License # 8836971

 

What is an Installment Sale Purchase?


An installment sale, otherwise known as a "contract-for-deed", is a creative financing technique utilized in the purchase and sale of real estate. Because it involves "seller-financing", it effectively eliminates the need for the buyer to apply with a bank or mortgage company in order to get qualified for a mortgage loan. Here at Dennis J. Zisa & Associates, we specialize in this type of transaction. Because we deal with numerous investors and developers, we are in a position to list and maintain a constant inventory of homes where the sellers are willing to hold the financing, and accept the balance of their proceeds in monthly installments. This presents an invaluable opportunity (and in some cases the only chance) for home-ownership, when a prospective buyer has "problem credit", or is unable to sufficiently document his income. The installment sale buyer need only to come up with the required down payment, typically $4000 to $6000, depending on the home he selects. The balance on the installment contract is paid off in monthly, fixed rate payments, just like a mortgage.
 

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Rainmaker
686,859
Hella Mitschke Rothwell
(831) 626-4000 - Honolulu, HI
Hawaii & California Real Estate Broker

Dennis: I presume most sellers will go for a balloon payment in about 5 years? And what is the current fixed interest rate?

Jul 26, 2011 07:48 AM #1
Rainmaker
347,501
Dennis J. Zisa & Associates, Inc.
Dennis J. Zisa & Associates, Inc. - Camden, NJ
29 years in So. Jersey and the Greater Camden area

Some sellers do ask for a ballon payment, typically 7-10 years, but more often than that they simply leave it up to the buyer knowing that this process was a long-term investment. Interest rates for our investors with seller financing is 8.5% (Motive to do the process from the start).

 

Thanks for the comment!

Jul 26, 2011 08:07 AM #2
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Rainmaker
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Dennis J. Zisa & Associates, Inc.

29 years in So. Jersey and the Greater Camden area
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