Posted by Eric SEI on November 04, 2007 at 17:56:13 from (74.215.36.88):
In Reply to: Good deals posted by C-man on November 03, 2007 at 11:38:52:
I have read about this concern in several magazines. One solution is a contract that retains part of the profit to the seller. It is set up like this. A period of time is chosen, 20 years is typical. Then for every year the buyer keeps the property before selling it he gets to keep 5% (100% / 20 years) of the profit. If the buyer kept the land for 5 years then he would get 25% of the profit and the seller would get 75%. The agreement would have to be filed at the courthouse just like a lien.
A arrangement like this protects the seller from buyers who are getting a special price. If the buyer keeps the land then the agreement will never effect him. An agreement like this may make the seller more comfortable and therefore more agreeable to the sale price.
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