Issues with Sell and Rent Back
Is a Quick House Sale to a Property Cash Buyer a Good Idea?
Mar 29, 2009
A sell and rent back scheme involves a quick house sale to a property cash buyer at about 75% of market value. Selling property can be difficult in a falling market. The majority of homeowners choose sell and rent back because they are desperate to move house or wish to stop repossession in it's tracks.
It can take many months for a private house sale to go through; sell and rent back offers a vastly quicker alternative. Selling a house to a property cash buyer means that the entire house selling process can be completed in just days. Sell and rent back normally covers legal fees and the availability of a property cash buyer means that there is no 1-2% estate agent fee.
Sell and Rent Back Doesn't Offer Full Market Value
The primary motivation of sell and rent back is to allow the property cash buyer to make a profit, not to help the seller or stop repossession. Whilst money is saved on estate agent fees and legal costs, sell and rent back typically involves a cash offer of only 75% of fair market value. Although it takes longer and will incur additional fees, a private house sale will realise greater returns.
Lack of Impartial Advice in Respect of Sell and Rent Back
Whilst consumers struggling with money problems can approach debt advice charities, there are no real impartial experts available with respect to sell and rent back. This means that consumers are reliant on the advice of the property cash buyer. Thinking can also be rather blurred when someone is in a difficult situation or trying to stop repossession.
Assured Shorthold Tenancy Agreements
Regulations governing sell and rent back are currently few in number, potentially exposing consumers to ruthless business practices from property cash buyers. Whilst some providers of sell and rent back schemes work highly ethically and couldn't be more helpful, it can be difficult for a consumer to be sure which category a business falls into.
Whilst a quick house sale and being able to continue to rent can help resolve money problems, there are issues surrounding the use of assured shorthold tenancy agreements. These could mean that a tenancy agreement ends in just 6 to 12 months. Those seeking a long term rental relationship will need to be sure that this is drafted into the contractual arrangement.
A private house sale will help someone realise a more realistic price than sell and rent back. However, those seeking to stop repossession are likely to find that this is the only option available. A quick house sale to a property cash buyer can simplify the entire selling process and allow someone to remain in their home. Always avoid assured shorthold tenancy agreements.
Those struggling to stop repossession should check to see if they have an unlawful mortgage agreement. This could mean that a homeowner is entitled to compensation or even write-off the debt in certain circumstances. This also applies to illegal loan agreements and unlawful credit card agreements prior to April 2007.
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