How to sell a financed apartment?

Guide to selling a financed apartment
  • Author: Mohsin Khan
  • Posted On: May 24, 2022
  • Updated On: July 9, 2023

Anyone who wants to finance a property knows that they will have to submit to a long-term installment before the deal is finally finalized.

So, it is natural and very common that in the meantime, something happens, and you have to give up the apartment you haven’t even finished paying for yet. And so? Is it possible to sell the apartment that is still financed?

Imagine the situation: you bought a property, but before you finished paying all the financing installments, you decided to sell it. This can happen for a variety of reasons, after all, funding is a long-term commitment, and many things can happen during that time.

After some time, you finally found a buyer willing to pay a fair amount and pay the rest of the financing. But and now? What to do right now? How to sell a financed apartment?

This is where what is used to call “transfer of real estate financing” comes in. But naturally, this is a complicated and a bit bureaucratic process. So, to clear all your doubts about this subject, keep reading our article!

After all, how to sell a financed apartment?

Poster to sell a financed apartment

Let’s start with the good news:  it is possible to sell a financed apartment without paying off all your installments! So don’t worry if that’s your will and you’re still far from the end of the financing agreement.

From now on, we will teach you the steps you must follow to complete this process and all the precautions that need to be taken so that everything goes as smoothly as possible and you don’t have a headache!

First of all, we need to make one thing very clear: the relationship between the property and the bank. When you decide to finance a property, you don’t own it. The owner is the bank, and it will only be yours when you finish paying off the financing, that is, paying off all the installments.

The bank is called a “resolvable owner,” which means that it cannot sell, rent or use this property (the sale by the bank only becomes authorized if you do not pay your debt).

Therefore, even if you can put your financed apartment up for sale, the bank needs to be informed and participate in the entire process, which will only be completed if it accepts the new buyer.

Step by step on how to sell a financed apartment:

To sell a financed property, you need to follow some steps, and they will depend on how the new buyer will choose to do the deal. Just like you at the beginning, the future resident of your apartment can choose to:

  • Cash payment;
  • Financing.

And these options need to be analyzed individually, as each of them will need a different action. Let’s do it in steps!

Sale by cash payment

Each payment method has a different treatment when buying a property already financed. This bureaucracy is important to protect both parties and for all steps to be carried out in the best possible way.

In the case of a cash transaction or without new financing, all the outstanding amounts of the property must be settled with the bank responsible for the financing.

The seller needs to contact the bank responsible for the transaction and ask for the updated outstanding amount. Payment must be made with the money that will come in with the sale of the property; in this way, it is possible to pay off the apartment without damages.

It is important to remember that the seller will only receive the difference in the sale value, as the rest will have already been used to finish paying off his debt with the financial institution.

This process requires more bureaucracy and trust, so it is always recommended that it be closely monitored by professionals who can help both sides.

After that, the financial institution can finally state that the property is paid off without pending issues, assuring you and the buyer for the rest of the entire process. It is also necessary to register the property in a notary’s office to transfer the apartment to the buyer, officially becoming the new owner.

Sale by real estate financing

It may also happen that the buyer wants to acquire the apartment through real estate financing, just as it was purchased at the first moment. In this modality, the future owner also needs to participate in the entire process.

If the financing bank is the same, they will gather all the financing information as the rest of the financed amount and interest, and after that, a new contract will be drawn up between the parties (old and new owner). . faisal hills is a major worth housing society developed by the reputable and reliable developers of the real estate market.

The clauses of this contract provide that a part of the current financing will be used to pay off the seller’s debt. The latter will only receive payment when the financing entry process is finalized between the financial institution and the new owner.

Once again, it is important to remember that the amount the seller will receive will be the difference between the value of the property and the total debt with the bank

Is it possible to sell a financed property if there are available installments?

Yes, it is possible. In a way, this is an alternative that can help those who have taken out the financing and, for some reason, are not in a position to meet their obligations. A transaction also opens a gap for the buyer, as he will have greater power in the negotiation due to the process’s factors.

What are the risks of purchasing a property financed without consulting a bank?

A very common but very risky practice popularly known as the “Drawer Contract,” where you sell the property through an Assignment of Rights Agreement. The buyer continues to pay the installments on your behalf. This contract cannot be taken to the property registry.

Operations like this can bring numerous inconveniences for those who sold and those who bought the good in question. Some examples of the problems that may exist: the buyer fails to pay the installments, causing his name to be protested and executed; the death of either one leaving the family unprotected, plus a few others.

Remember: the bank remains the “owner” of the property as long as it is financed. Therefore, any contract for the apartment sale must be signed by him. Otherwise, it is not fully valid.

What is real estate financing, and how does it work?

Real estate financing is a great alternative and is also widely used by those who want to have their property and do not have the capital to acquire the equity in cash. You can better organize your budget and divide the amount invested into installments that can last up to thirty years in financing.

These criteria depend on several factors, such as down payment, property price, and the type of financing chosen. is another prominent housing society that possesses all the features to be chosen as a fruitful investment.

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Author: Mohsin Khan

Mohsin has worked as one of the experienced editors with ConstructionHow since 2020 with a total span of 5 years of experience in business PR, boasting a remarkable professional trajectory, he has collaborated with entrepreneurs and startups, and certain publications over the last few years. His unwavering interest lies in the construction industry and related materials. He believes in creating functional and aesthetically pleasing buildings, and homes that fall under the right budget. With a wide range of experience in construction, he also tapped into DIY and home improvement projects based on his extensive set of knowledge in the industry.