Residual purchase money mortgage

There are several alternatives to the residual purchase money mortgage if the purchase price of a property cannot be paid in full immediately:

1. Bank loanThe buyer can finance the outstanding purchase price with a regular property loan from a bank. This is the most common method of financing a property. The bank receives a land charge or mortgage as security.

2. Payment by instalments agreementSeller and buyer can agree to pay the purchase price in instalments, whereby the buyer pays the outstanding amount in several instalments. This agreement can be customised, but the seller does not have the security of a mortgage.

3. GuaranteeThe buyer can provide a guarantee from a third party (e.g. bank or private individual). This surety guarantees the seller that he will receive his money even if the buyer becomes insolvent.

4. Notary escrow accountA notary escrow account can be used to hold the purchase price in trust until all conditions of the purchase agreement have been met. This creates security for both parties, especially if payment is delayed.

5. Right of first refusalIn certain cases, the seller may be granted a right of first refusal if the buyer is unable to pay the purchase price. This right enables the seller to buy back the property or sell it to another buyer.