What Is A Structured Real Estate Sale, And How Can It Help Sellers Save Money

Thursday, June 6, 2019, 6:00 AM | Leave Comment

Real estate sales and acquisition can be some of the most significant financial transactions in a person’s life.

Whether you’re a buyer or a seller, you probably heard of structured real estate sales. What are they, and how can you benefit from this particular arrangement?

Keep reading to learn more about structured real estate sales, and discover how they can help you save more money, ease on the burden of taxes, and much more.

What Is A Structured Real Estate Sale, And How Can It Help Sellers Save Money

The concept of structured sale was first popularized by Allstate, a life insurance company. The idea is relatively straight-forward, and it actually combines some aspects of periodic payments/life contingent annuity, with tax regulations concerning installment sales.

In other words, it is a particular type of real estate transaction, which is conducted in installments. Why would the seller prefer this approach, rather than a traditional property sale?

Structured real estate sales can help sellers ease off the burden of taxes. In fact, a structured sale enables property sales to pay taxes every tax year, based on each installment, rather than having to pay everything at once.

This process is particularly useful for property sellers who wish to defer the massive hit on their taxes that would come from the sale of a property. With a structured sale, they can indeed “structure” their income through a more diluted span of time, thus making it easier on their taxes.

Sometimes referred to as an “ensured installment sale,” a structured sale can help the seller save a lot of money, but enabling tax deferrals, across several installments over a certain period of time.

Sellers can also use a high-credit quality alternate obligor as a way to make sure that they’ll actually receive every payment. Usually, transactions can be arranged in different ways, to suit differentness and sale structures, including smaller sales and minimal installments.

Structured real estate sales are very convenient for sellers because they can design payment streams in various ways. This arrangement is extremely flexible, allowing the seller and buyer to arrange the most optimal scenario to conclude the sale properly. Due to these characteristics, it’s not strictly necessary to have a massive flow of cash for a structured settlement.

“How about selling my structured settlement payments?” Selling these contingent payments might require a higher level of expertise, as well as the support of a reputable provider specializing in these particular transactions.

What Is A Structured Real Estate Sale, And How Can It Help Sellers Save Money 2

In addition to that, a structured sale is also quite excellent for sellers who are looking to maintain a continual stream of income over time. This is a much better option than property management for most people because it doesn’t involve the hassles and obligations that often come with it.

Structured real estate sales might require extensive expertise in tax planning, as well as in other areas, such as settlement. This article barely scratches the surface, but there are definitely many reasons why you should consider structured real estate sales. It’s important to weigh your options, and consider the process very carefully.

Structured sales could be flexible and practical, but it’s up to you to determine whether they’ll work in your situation. With the help of a qualified and reputable company, you might be able to navigate the best option and come up with the best set up for the structured deal you really need.

Reference information:

1. http://www.businessdictionary.com/definition/structured-sale.html

2. https://wahlstromandassociates.com/structured-sales-property-or-a

3. https://www.biggerpockets.com/blog/2007/01/12/what-is-a-structured-sale-part-1/

Author Bio

Kathy is a financial adviser and blogger. In her blog, she addresses various structured settlement issues including how buying and selling structure settlement payments work. She is associated with Catalina Structured Funding, Inc., a company that provides customers with most cash for their structured settlement or annuity. Buzz her on twitter to discuss your situation.

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