The installment contract is sometimes risky and bothersome to many sellers. Consequently, many property sellers will not even consider the installment contract option unless they are unable to sell the property in a timely manner.
With hesitant or unsure sellers, the down payment provision is a strong enticement to take the risk on the prospective buyer. The installment contract is normally structured so that if the buyer does not meet the responsibilities and conditions outlined in the contract, the seller can terminate the contract and keep all funds paid by the buyer.
This may sound as if the buyer is getting the short end of the stick; however, it is important to note that the seller has the most to lose—namely, the property.
This down payment is a negotiable feature. If the buyer can make an attractive proposal to the seller, a formal down payment may not be required. Consequently, it is feasible and highly encouraged for the buyer to enter into this agreement with little or no down payment.
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