Instalment Sales Agreement: an alternative home financing option in the property market

Abstract

The study was conducted in attempt to investigate the viability of the INSTALMENT SALE AGREEMENTS concept in the South African residential property market. The study aimed to answer the pressing question on whether the concept of an Instalment Sales Agreement would stand ground as a viable alternative/option for both the purchaser as well as the credit provider for properties ranged above the governmental subsidy schemes and programmes and below R500 000 niche market of Gauteng. This particular research aimed to investigate the core challenges as experienced and viewed by the main stakeholders in the process of furnishing and/or the acquisition of residential property whilst investigating and addressing adequate solutions beneficial to the respective parties as viewed and interpreted from their respective vantage points. The main concerns identified include primarily whether developers would find it feasible to develop and sell the said properties on the basis of an Instalment Sales Agreement. Secondarily whether prospective clients will be willing and able to purchase and secure residential property on the basis of an Instalment Sales Agreement as an viable alternative sales model whilst, accepting the concept as a feasible and reasonable alternative to conventional and traditional property purchasing and acquisition methods on offer in order to achieve property ownership as opposed to possibly not being successful nor able to qualify to secure a home loans or government subsidy.