To understand what goodwill is, it is first necessary to understand that we call goodwill the profit acquired when transforming the value of an asset or even a monetary execution, which can also be understood as the interest present in financial practices, especially in plots.
In this sphere of investments, the process of buying and selling goodwill is very frequent, as in car, real estate and land financing. Therefore, it takes place when the cost of a property becomes higher than it was in its net value, and this process occurs because the property has a different value in the market due to its appreciation.
The consequences of goodwill can be both positive and negative, since, on the one hand, a citizen can obtain a property of their own through this process, as well as being in debt for years.
What this article covers:
What is goodwill?
In the financial world, it is necessary to understand what goodwill is. Its term indicates all profit acquired in some financial action. In other words, it is what we understand as the value that is pocketed more in the purchase of a product.
Thus, the premium manifests itself as a discrepancy when we compare the cost of a commodity originally and its cost in trade. When we have the dynamics of a buyer and seller of goodwill, the buyer pays the installments that the seller has fulfilled until then.
What is it for in a property?
In a property, the goodwill is sold as a means of transferring that good to another person, who becomes the owner of the property only when paying the full amount of this goodwill. Thus, goodwill serves to sell the financing of a property that is in progress, as well as allowing people to have their own properties after months or years of installments.
How is the goodwill of a property calculated?
Now that you know what goodwill is, let’s explain about calculating the goodwill of a property, which can be very complex to perform due to its inconsistency, since the value of a property can decrease or increase.
Therefore, it is important to have the assistance of a Realtor🇧🇷 However, in short, to calculate the goodwill of a property it is necessary to measure the installments paid and verify its recent cost. Also, you can check the real estate market to know if the property has appreciated or depreciated.
How to safely calculate?
The act of calculating is quite complex, but rewarding. The value is net and may increase or decrease. But, if the seller seeks to calculate the goodwill with a focus on monetary correction, it is necessary to carry out a calculation based on the installments already paid with the dates and compare with the current one.
To get a sense of whether the value of the property has increased or decreased, look for real estate prices in the region and compare with the beginning of the financing carried out.
It is recommended that you always have a broker with the seller so that there are no errors in accounting and he will also have the necessary experience to place himself in the region, as well as have the most correct price for the premium.
How does the purchase and sale of a real estate premium work?
The purchase and sale of a real estate premium involves a seller, who no longer intends to proceed with the payment of installments on an acquired property, and a buyer, who in turn wants to pay those installments.
In other words, the seller hands over the financing of a real estate property to the buyer, who becomes the owner when the installments run out. After payment of all installments, the bank updates the property registration.
What is the risk for the seller?
For the seller, the main risk concerns the restriction that this financing causes, since being active in this action for an indefinite period, the seller may not have control over the property – this situation can extend exponentially, as for example, 10 , 20, 30 years.
Other risks that are very important for the seller to keep in mind are:
- To avoid the name in Serasa and even become a defendant, it is important that the property’s IPTU installments and expenses are paid. Your assets will also be seized.
- If I activate the real estate financing linked to the drawer agreement, the goodwill seller will most likely not get another real estate financing approval.
- So that it does not make it difficult for the seller to become free of financing obligations, do not focus on a new sale of the goodwill.
As much as it seems much heavier than in the case of the buyer, the seller just needs to have his critical common sense for everything to go well.
What is the risk for the buyer?
Many times, there may be cases where the buyer does not ask for the public power of attorney to be made, there may be a high possibility that it is a case of a scam. Therefore, the person who sold the goodwill possibly had no connection with the real estate financing agreement.
Other risk factors in which the buyer’s attention needs to be more than redoubled are:
- If several installments are not paid, and the debt balance of the contract is high – or with fiduciary alienation – the property may have already been consolidated by the Financial Institution and the property may be judged as the object of an extrajudicial auction.
- If the seller consults a notary and requests the revocation of the power of attorney and informs the Financial Institution, the seller can leave the buyer tied up for not having more options.
- When the full payment of the discharge agreement is made in the name of the seller, the buyer will have to make two transfers at the land registry office.
- If the seller ends up going bankrupt and creates debts from lawsuits, creditors can ask for the pledge of the credit already made in the mortgage. Thus, having to enter with a lawyer to defend your right in the processes based on the drawer contract – if it is formalized.
- Before the Financial Institution/Real Estate, the financial debtor will continue to be the seller of the goodwill, and he can renegotiate the debt, as well as carry out loan operations, take advantage of credit or any other actions linked to the contract that may generate benefits for such.
It is important to focus on transacting with people of good character and trust. Unfortunately, you can’t get carried away in situations like this.
It is extremely important that, in order to safely negotiate the goodwill of a property, there are due certificates that certify the change of owner, in this case, who will pay the remaining installments, and the value of this process. All these documents must be registered in a registry office to ensure the action.
Goodwill ratio of real estate and investment
Investment is essential to understand what goodwill is and how it works. Its market value, valuation, intrinsic value. All of this is extremely important when it comes to this subject, as it involves so much money.
Even with its natural complexity, as there are shares of numerous types and values, goodwill is the premium when these shares are traded. In other words, at the time of purchase of a share, the premium represents the extra difference that is paid by the shareholders, in relation to its market value.
So, focus on studying the market, and now you know what goodwill is, just be attentive when looking at your finances, real estate and everything related to the world of goodwill. The important thing is not to get lost and get into trouble.