What is the name of a bilateral agreement between a seller, (the vendor) and a buyer (the vendee) in which the vendor defers receipt of the entire purchase price of a property over a specified period of time?

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Law

Skyler

13 November, 12:29

What is the name of a bilateral agreement between a seller, (the vendor) and a buyer (the vendee) in which the vendor defers receipt of the entire purchase price of a property over a specified period of time?

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Answers (1)

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Cookie Dough · Answer 1

The correct answer is Land contracts or Contracts for deed.

Explanation:

Land contracts or contracts for deed were a type of contract with easy accessibility and good financing conditions than those offered by institutional lenders between 1970 and 1980.

When these lenders began to lower the necessary requirements to grant loans and mortgage rates declined, these types of contracts were disappearing although they did not completely.

When people had difficulties with banks to ask for loans or mortgages, then they went to these contracts that were much more accessible.

The way it works is as follows:

An agreement is established between a Vendor and a Vendee, where the Vendor agrees to sell a property by financing the purchase for the Vendee.

The Vendor keeps the legal title and gives the Vendee the equitable title.

Financing is offered to Vendee.

Once the payment is completed, the seller will receive a deed of ownership.