Of construction, real estate and people

by Rémi Letourneau

The real estate sales balance: an interesting tool to facilitate transactions!

Video thumbnail of Rémi Létourneau explaining the Real Estate Sales balance.
In the field of real estate, the balance of sale offers the possibility of buying a property without having to immediately pay a large sum of money. It represents an agreed amount that will be paid to the seller at a later date.

When a buyer acquires a building, part of the price is given to the seller at a later date, generally between 3 and 5 years.

For the buyer, this allows them to borrow the rest of the amount from a bank, using the sale balance as a form of down payment for the purchase. This means that during the first years, the buyer will repay part of the mortgage according to the terms agreed with the bank. When the sale balance becomes due, the buyer can then renegotiate the mortgage on the property. The repayments made until then, as well as the possible capital gain of the property, can be used to increase the loan and repay the balance of sale.
Now, why would the seller accept such a proposal?
When the buyer offers a sales balance, he generally does not negotiate the purchase price of the property. He agrees to pay a higher price so he doesn’t have to shell out a large sum immediately. In addition, the seller accrues interest on the amount of the sale balance, often at a higher rate than the banks.
By communicating clearly and ensuring a clear understanding of this option, both parties can benefit. This makes it possible to negotiate on aspects other than the purchase price, thus offering the seller the desired price and the buyer an attractive return on his investment.

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