Annuity - what is different than when you buy?

Purchase on life annuity, the purchaser at regular intervals making agreed payments to the seller, until it dies. With the death of the seller, the property in the possession of the purchaser passes.

Normal real estate purchase, the purchase price is payable at once and the House or the apartment goes directly to the buyer. Other rules apply when buying on annuity. Basically, several variants are possible, are determined from the owners:

  1. Owner takes off and leaves the House immediately to the future owners.
  2. Owner is living in the House, only insert the new owners if owner has died.
  3. The real estate is so great that owner and purchaser together it can stay.

Advantages and disadvantages for the seller

In today’s times, where the old-age poverty plays an increasingly important role and the financial situation of the majority of the population looks problematic, the sale on life annuity is an interesting option, to supplement his income or pension. And without having to give up his property during his lifetime. At the same time it carries the same risks as with a rental. The purchaser must be liquid, regular payments should protection be secured for example by the registration of a lien in the land register or the template of a bank guarantee, if the buyer loses its creditworthiness.

Also, experts on the sale on annuity recommend the agreement of a value or interest rate, which is based on the consumer price index. So the cost of living to rise, increases the height of body pension payment because otherwise quickly has a “money-losing” proposition.


Good negotiate on both sides! Only if the amount of the annuity for both parties is interesting and meaningful, the purchase of an annuity is a real alternative to the normal purchase.

Advantages and disadvantages for the buyer

Biggest advantage of the buyers is the fact that a real estate without large upfront payment will be purchased. Credit & co are so unnecessary. Good and bad at the same time is that you don’t know as a buyer, how long will last the pension payment. With “luck”, the owner dies quickly and one has to pay only a few rates, pay for decades for a property that does not belong to a pitch and reached in the end perhaps a sum, immediate payment (with interest for a Even more than bank financing). The worst for the buyers, the sum of payments exceeds even the value of the House at the end.

And another important point: when making a purchase on lifeannuity you have a secure, fixed income and a larger sum ofmoney on the side, to also meet the pension payments, nomatter how long they will last.