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geocan10

Installment Sales Contract

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I am negotiating with a homeowner now, and I got a really good under-market for a condo.

 

I intend to do a quick flip before closing. However, as Plan B, I do need to secure financing for the property just in case. Since I am in Canada, subject-to does not seem to work too well here, since we have a centralized Land Title Office that holds all deeds. Banks will be notified automatically for a title change. However, the seller is willing to leave the exsiting mortgage in place, and engage into an Installment Sales Contract. In other words, we will lay out some payment terms in the contract, and the title would only be transferred after certain conditions are met.

 

I was researching on Installment Sales Contract, and it seems that there may be some pitfalls for the buyers. Could some gurus please share some specific precautions before I lock myself into such a deal?

 

Thanks a bunch! :)

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Hello, geocan10, and welcome to The Naked Investor. I'm not the Legal Eagle, but let me give you a preliminary answer until he comes along.

An Installment Land Contract is an agreement wherein the buyer makes payments in a manner similar to a mortgage. The buyer has equitable title. However, the seller holds legal title to the property until the contract is paid off. The buyer has equitable title and, for all intents and purposes, is the owner of the property. When the payments are completed, a deed is then recorded and legal ownership is transferred to the buyer. It's a form of seller financing.

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