Property owners have many options when selling real estate. One potentially beneficial option is an installment sale for real estate, which is a type of seller financing agreement.
This two-part post will take a closer look at what to consider when making real estate installment sales.
Tennessee Real Estate Market Watch
The median price per square foot of homes in Tennessee during September 2023 was $229. However, real estate data is always changing. Contact the Title Group of Tennessee if you need title services when buying or selling a home.
With an installment sale, the buyer and seller agree to multiple payments over time instead of a lump-sum payment. The buyer takes possession of the property, while the seller retains a security interest.
Installment sales can have several tax benefits for sellers; however, the sale must meet various requirements to be eligible. The chief requirement is that the sale has multiple payments, and at least one of the payments must also be in a different tax year from the sale. The seller must also register the sale using IRS form 6252.
An installment sale is a form of seller financing, and like other types of financing, there are important sale and loan terms to consider. The following are the terms for an installment sale:
Installment sales can be beneficial in many ways. The following are some of the ways sellers can benefit from installment sales:
We recommend consulting real estate and tax professionals to help with installment sales. You can also come back for part two, where we will look closer at installment sales and taxes.
Do you need title services for a seller financing deal in Tennessee? Click here to contact the Title Group of Tennessee. We are local title experts who can help make the deal smoother and more secure. Reach out now to find out more about our services.
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