Important
A higher contract price does not guarantee a better economic outcome. Discount future payments for risk, servicing burden, and what happens if the buyer defaults.
Key terms to define
- Down payment and interest rate
- Amortization and balloon dates
- Security instrument and foreclosure remedies
- Insurance, taxes, and maintenance responsibilities
- Due-on-sale / transfer restrictions on any existing mortgage
Rules and exemptions vary. Obtain transaction-specific legal and tax review.