Can the buyer refuse a structured installment sale?
Yes. The buyer has to agree, because the purchase agreement addendum and the assignment both need the buyer's signature. Most buyers have no reason to refuse: they pay the same price at closing, their lender is unaffected, and once the obligation is assigned they owe nothing after closing. Make it a contract term early, before you accept an offer.
Buyer cash → Assignment Co. → fixed annuity → You, on schedule
Hans Goldstein structures installment sales for sellers and works alongside their CPAs. Email hans@goldsteinco.net or call 213-340-2018.
Why does the buyer have to sign anything?
The installment method works because, on paper, part of the price is paid to you over time. That deferred payment obligation starts with the buyer. At closing the buyer assigns it to an assignment company, which assumes it and funds it with a fixed annuity from a highly rated life insurer (A or better by A.M. Best or equivalent). Two documents need the buyer's signature:
- An addendum to the purchase agreement that states the structured amount, the payment schedule and the assignment, and tells escrow how to split the funds.
- The assignment agreement, in which the buyer's payment obligation moves to the assignment company and the buyer is released.
Without those signatures there is no installment obligation to assign, and the sale is an ordinary cash sale. You cannot force a buyer into the structure after the contract is signed unless the contract already requires it.
Why would a buyer agree?
Because almost nothing changes on the buyer's side:
- Same price. The buyer's cost is the same as an all-cash purchase. On an illustrative $2,000,000 sale with $800,000 structured, the buyer wires $2,000,000 to escrow either way.
- Paid at closing. The buyer wires the full price to escrow on closing day, as in any sale.
- No credit risk, no ongoing debt. The buyer is not carrying a note to you, and no one is relying on the buyer's future finances.
- No obligation once assigned. The assignment company takes over the payment obligation at closing and the buyer is released.
- Lender unaffected. The buyer's loan funds the same purchase at the same price.
- No tax filings for the buyer. The installment reporting is yours (Form 6252).
What is the tax bill on your sale going to be?
Send me the sale price and rough basis. Within one business day I'll email you the actual number and the Seller's Guide to §453. If it doesn't fit your deal, I'll tell you that plainly.
No retainer · no obligation. Hans Goldstein, a licensed insurance agent (CA Insurance License #4273294), will contact you and may discuss insurance products, including annuities.
The buyer's real cost is reading a few extra pages, possibly with an attorney. The buyer's page walks through each document the buyer signs.
What do buyers usually object to, and how do you answer?
Some buyers will still say no, or ask for something in return. You cannot control that; you can make the request early and clear.
What if the buyer refuses?
Negotiate it as a term early. The strongest position is to put the structure in your counteroffer or acceptance, before you are under contract. Once the contract is signed without it, you need the buyer's consent to amend, and the buyer has little reason to bother.
If the buyer still will not sign, your options:
- Pay the tax. Close as an ordinary cash sale and take the gain in one year. See should I just pay the tax?
- Exchange part under §1031. If you want to stay in real estate, a partial 1031 defers tax on the exchanged portion. The exchange documents also need to be in place before closing.
- Carry a note yourself (seller financing). The buyer pays you over time and you get installment treatment, but you carry the buyer's default risk and have to foreclose or sue if payments stop. See structured sale vs seller financing.
- Find another buyer. If the tax difference is large, holding out for a buyer who will sign may be worth it. That is a pricing decision to make with your agent and CPA.
Frequently asked
Q: Can I add a structured sale after the buyer signs the purchase agreement? A: Only if the buyer agrees to an amendment, and only before closing. After closing it cannot be added.
Q: Does the buyer have to qualify or be approved by the insurer? A: No. The buyer's role is paying the price at closing and signing the addendum and assignment. The assignment company and insurer deal with you.
Q: Can I require the structure in the listing? A: You can state it in offer instructions and make it a term of any acceptance. Whether to do so, and how it affects buyer interest, is a question for you and your agent.
Q: What if the buyer is paying all cash with no loan? A: Nothing changes. Escrow receives the full price and splits it between you and the assignment company.
What should you read or run next?
- How do I bring it up with my listing agent?
- What documents does a structured installment sale need?
- Structured installment sale vs seller financing
- Should I just pay the capital gains tax instead?
- You are the buyer: what you are signing
- How the deal works
- Installment sale calculator
- All structured installment sale questions
Who wrote this?
Find out what your sale is really going to cost you in tax, and what you can do about it
No retainer. On a funded structure, the insurer pays a one-time commission of about 4% of the amount structured to the brokerage firm that places it (Hans’s share is about 2.4%; no trail). It is built into the annuity pricing, not a separate fee.
Send me the sale price and roughly what you paid. Within one business day I’ll come back with the number you’re actually looking at and whether a structured installment sale can push it down. If it can’t, I’ll say that just as plainly.
You'll also get the plain-English Seller's Guide to §453: the math, the alternatives, and the cases where it does not work.
📞 Hans Goldstein · 213-340-2018 · CA Insurance License #4273294 · Independent §453 specialist · Goldstein & Co. LLC
Hans Goldstein, a licensed insurance agent (CA Insurance License #4273294), will contact you and may discuss insurance products, including annuities.
Run your specific numbers
The calculator runs your sale through real 2026 federal + state tax brackets and shows §453 savings vs lump sum side-by-side.
Run the calculator → 213-340-2018