If some one buys a home on instalments — for example $50,000 to be paid over 18months in divided instalments — can we ask the builder that if we pay full amount in 12 months instead of 18 months, can he offer us that property, say for example, for $45,000 instead of $50,000?
Is making such an offer valid according to Shariah?
Basically, can we ask him if he can give a discount if we pay them earlier than 18 months?
Please advise. Jazak Allah
Answer:
In the Name of Allah, the Most Gracious, the Most Merciful.
In principle, it is permissible for a seller to say to a potential buyer that the price of this thing is $100 if you pay in one month, $150 if you pay in two months and $200 if you pay in three months, for example.
However, for the sale to be valid and permissible according to Shariah, it is necessary that one of the offered options is chosen and agreed to by the two parties before concluding the sale and parting.
Therefore, in the example just mentioned, the buyer must clearly choose and specify one of the following options:
1. the price of $100 and the duration of one month for payment
2. the price of $150 and the duration of two months for payment
3. the price of $200 and the duration of three months for payment.
If the sale is concluded without choosing and specifying one of the options with the understanding that the buyer will choose one of the options in the future depending on what will be convenient for him, then such a sale is forbidden according to all the jurists. And if the two parties do conclude the sale in such a way (without choosing and specifying one of the options), it is compulsory on them to redo the sale in the proper manner (i.e. by clearly choosing and agreeing to one of the options).
Based on the above, if someone sells a house, it is permissible for him to say to a potential buyer that the price of this house is $50,000 if you pay in instalments over 18 months and $45,000 if you pay in instalments over 12 months. However, for the transaction to be valid, one of the two options ($50,000 over 18 months or $45,000 over 12 months) must be clearly chosen and agreed to by the two parties. If one of the two options is not chosen and agreed to by the two parties, the transaction will not be permissible and it will be compulsory on the two parties to do the transaction afresh by specifying and choosing one of the two options.
Hence, the answer to your question is that it is permissible for you to bargain with the seller and ask him to sell the house to you for $45,000 to be paid over 12 months instead of $50,000 to be paid over 18 months. However, if the buyer does agree then for the transaction to be permissible you must clearly choose one of the two options ($50,000 over 18 months or $45,000 over 12 months) before concluding the transaction and parting. It will not be permissible for you to conclude the transaction without choosing and specifying one of the two options offered by the seller.
The detail above is regarding the case when the house has not yet been bought i.e. the transaction has not yet been concluded. If the transaction has already been concluded and you and the seller agreed to the sum of $50,000 to be paid over 18 months then it will not be permissible for you and the seller to agree that if you pay within 12 months, you will only have to pay the sum of $45,000.
(Buhooth fi Qadaya Fiqhiyaa Mu’asara: 1/9-10)
However, for the sale to be valid and permissible according to Shariah, it is necessary that one of the offered options is chosen and agreed to by the two parties before concluding the sale and parting.
Therefore, in the example just mentioned, the buyer must clearly choose and specify one of the following options:
1. the price of $100 and the duration of one month for payment
2. the price of $150 and the duration of two months for payment
3. the price of $200 and the duration of three months for payment.
If the sale is concluded without choosing and specifying one of the options with the understanding that the buyer will choose one of the options in the future depending on what will be convenient for him, then such a sale is forbidden according to all the jurists. And if the two parties do conclude the sale in such a way (without choosing and specifying one of the options), it is compulsory on them to redo the sale in the proper manner (i.e. by clearly choosing and agreeing to one of the options).
Based on the above, if someone sells a house, it is permissible for him to say to a potential buyer that the price of this house is $50,000 if you pay in instalments over 18 months and $45,000 if you pay in instalments over 12 months. However, for the transaction to be valid, one of the two options ($50,000 over 18 months or $45,000 over 12 months) must be clearly chosen and agreed to by the two parties. If one of the two options is not chosen and agreed to by the two parties, the transaction will not be permissible and it will be compulsory on the two parties to do the transaction afresh by specifying and choosing one of the two options.
Hence, the answer to your question is that it is permissible for you to bargain with the seller and ask him to sell the house to you for $45,000 to be paid over 12 months instead of $50,000 to be paid over 18 months. However, if the buyer does agree then for the transaction to be permissible you must clearly choose one of the two options ($50,000 over 18 months or $45,000 over 12 months) before concluding the transaction and parting. It will not be permissible for you to conclude the transaction without choosing and specifying one of the two options offered by the seller.
The detail above is regarding the case when the house has not yet been bought i.e. the transaction has not yet been concluded. If the transaction has already been concluded and you and the seller agreed to the sum of $50,000 to be paid over 18 months then it will not be permissible for you and the seller to agree that if you pay within 12 months, you will only have to pay the sum of $45,000.
(Buhooth fi Qadaya Fiqhiyaa Mu’asara: 1/9-10)
And Allah knows best.
Mufti Faizal Riza
28/12/2011