Have you found a property you want to buy, but don’t have enough deposit (or sufficient credit history) to finance it? Or do you have a property that you would like to sell but the buyers who are interested are finding it difficult to get finance? Are you thinking of assisting your children to buy a property and want some security?
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Many people think that banks are the only option for finance for purchasing a dream home or investing in a property. But many people are unaware that there are other solutions which can be more suitable for them than a bank loan, more flexible and less rigid when it comes to getting the financing you need. So don’t let the lack of funds or complex contract terms and conditions bring you down and ruin your dream of buying a home or property, because you may be about to get the answer you were looking for with a vendor finance agreement.
Vendor Finance definition
In simple terms, the Vendor Finance definition is monies offered by a seller (a Vendor) to finance the sale of goods, services, or real estate to the buyer (a Purchaser). This is a legal way of selling property without the involvement of a third-party financier for the buyer. Through these contracts, the seller agrees to finance the transaction, while the buyer agrees to make regular payments until the entire sum for the property is paid – allowing you to buy without banks. This way, the costs of third-party banks or money lending institutions for the buyer are minimised. Sometimes the buyer is asked to make a small deposit, to show the seller that they are serious about making the purchase. The buyer will become the registered owner of the property only after the entire contract sum is paid.
Why should you consider Vendor Finance contracts?
If you are a seller, such contracts can be extremely attractive to those buyers who cannot access traditional property mortgages, which can be due to a variety of reasons. Property investors can also use this method to their advantage because it allows them to keep the investment to a minimum while increasing their real estate footprint. If you are a parent looking to assist a child to buy a property this can also be an alternative way of achieving that whilst also protecting any funds that you invest.
PAYMENT OPTIONS
Payment terms can be flexible, so if you are looking for a contract with such a feature, Vendor Finance contracts may be what you need.
Vendor Finance contracts are an option for commercial transactions as well which includes the purchase of businesses or commercial premises.
Are there any drawbacks to this approach? As with all real estate transactions you should obtain legal advice to confirm that you fully understand the terms to know which is right for you. Vendor Finance contracts are different from the traditional approach and you need to consider them carefully before deciding whether this is the best option in your case. Legal advice should be followed to avoid exposure.
If you want to find out more about vendor finance arrangements and see what your options are, contact Aylward Game Solicitors. We can provide all the information, advice, and documents required to enable a transaction to proceed, for both buyers and sellers.
Aylward Game Solicitors are experienced in both commercial and residential vendor finance transactions and complex property law matters throughout Queensland.
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Article Source: Property Lawyers Brisbane