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A sale without payment of the price can be considered a fictitious sale. Is it possible to sell a property without paying anything at the time of signing? Let's analyze all the options for completing a sale and purchase without any money involved.
What options do you have available?
The prevailing thought leads you to identify the exchange of checks with the final moment of the house selling process. The two parties who have started a real estate negotiation, however, are free to agree as they see fit for deferred payment or in installments, or even not to provide for it at all while maintaining the validity of the contract just concluded.
From a legal point of view, in fact, the transfer of ownership is concluded with the drafting of the deed at the notary's office. Once the deed is signed, the buyer and seller are free to establish their preferred payment methods through a private agreement. In the event that one of the parties fails to comply with the agreement, the other has the right to request the termination of the contract for breach within 10 years of the deed.
Here are some of the most common scenarios for concluding a sale deed without any transfer of money.
Sale with retention of title
You and the other person involved in the transaction can agree on payment in installments with deferred transfer of ownership. In practice, upon signing the deed, ownership of the home remains in your name, but you leave the buyer the possibility of enjoying the property. Upon payment of the final agreed installment, you definitively sell the house, losing all rights.
With the sale with retention of title there are therefore two distinct moments: the first is the transfer of possession in a relationship similar to a lease, the second is the final transfer of ownership. Be careful not to confuse this institution with the lease with pact of future sale.
An agreement not to transfer ownership
It also happens that the seller and buyer reach an agreement to stage a negotiation – which will produce no effect – with a fictitious sale. A person struggling with debt, for example, might seek the assistance of relatives or friends in a simulated negotiation to avoid foreclosure on a property.
With an absolute simulation, the seller only nominally cedes ownership and possession of their home, eliminating it from their assets but effectively continuing to live there as before. This contract has no legal consequences, and potential creditors can at any time demonstrate the groundlessness of the agreement to claim what they are owed.
A disguised donation
Then there is the hypothesis of a relative simulation, that is, a document that provides for the actual transfer of ownership without paying anything.
A classic example is the sale used to disguise a real estate donation. As you may already know, donation allows you to transfer a property to relatives or friends free of charge, upon payment of a tax calculated differently depending on the relationship between donor and donee.
However, if you gift your property to only one of your future heirs, you expose yourself to the risk of disputes from the other people who see their inheritance rights infringed. Let's say you have two daughters and a son and you decide to transfer the family home free of charge to one of the women. In this case, the other heirs have the right to request the return of the property or the liquidation of their share.
A sham sale is more complex to prove than a donation and offers you greater protection against possible recriminations. The excluded heirs still have the possibility of proving the fictitious contract and requesting what they are entitled to.
Sale with alimony
Another act of sale without the exchange of money is the transfer with alimony. This is an agreement that does not involve payments. An obligation is established between the buyer and the seller: the buyer undertakes to take care of and support the seller for his or her entire life.
The agreement may have the nature of a relative simulation if the parties decide not to actually follow through on the commitment undertaken. Even in this case, therefore, the agreement ends up masking a free transfer.
Concluding a real estate transaction at no cost is very useful, especially for saving money on transfers of property between parents and children. If you're interested in learning about the options available to you for doing so, we recommend reading the guide we've prepared on selling a house between relatives. We can tell you right away that in our opinion, the best solution is a donation with sale and consent from the heirs.
Now that you know how and why it might be useful to waive the payment, you have some more information to decide how to sell your property. To avoid any worries related to selling, why not choose Casavo services? We offer you a quick and free valuation to find out the value of your property, and then we'll take care of finding the best buyer for you. If it meets our criteria, we'll make you a direct purchase offer!
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