Is the ghost of repossession haunting you?
The sell and rent back scheme was born into the property market around 2006 in response to the fear of thousands of homeowners losing their homes. The idea of sell and rent back your home is basically a rescue from repossession. If the homeowner is struggling financially it is possible to turn to an investor and offer their home for a quick sale but with the benefit of being able to stay living in the property paying rent.
About 6-12 months later, the sell and rent back scheme evolved to help the homeowner even further. As many people had built up a lot of equity in their homes over the years, a new buy back option was introduced. This provided a huge benefit as it gave the struggling homeowner the option to buy back their home once they had sorted out their finances and therefore keep the vast majority of the equity for themselves.
However, once the homeowner has decided to take this path of sell and rent back, it is very important to be aware of some potential problems and the way in which they can be prevented:
Fee Payments
All fees in the sell and rent back scheme are paid for solely by the buyer. These include the survey and the solicitor costs. Be aware of any fees the homeowner is being asked to pay. The main reason for this is if the sale fell through, any fees paid will be lost.
Sudden increases in rent
It is very important the tenancy agreement is thoroughly read before completing on the sale. Make sure the agreement states that the increases are a maximum of twice a year and in line with inflation. Many unscrupulous companies offer a decent rent for the first six months and then on renewal of the agreement, hike the rent so high that the tenant has no choice but to move out.
Sale of the Property
Be aware that once the property has been sold the new owner can sell the property at any time forcing the tenants to leave with just two months notice. If the sell and rent back scheme was a part of the sale it is very important to ask for a restriction of sale agreement. This agreement prevents the buyer from selling the property without written authorization from the tenant.
Although there can be some pitfalls along the way, there are also many advantages in opting for the sell and rent back scheme. The first and most important is the homeowner will not be repossessed. There is always the option of selling the property on the open market; however this can take up to one year for the sale to happen in the present market. It is imperative that the homeowner write their finances down on paper and check if this solution is viable.
Another advantage is there is no cost involved for the homeowner who at this point cannot afford any extra expenditure. A third advantage would be total discretion. No one will know and the homeowner’s daily life will not be disturbed.
With home repossessions on the increase and at the highest level in years, the sell and rent back scheme definitely is an option to be considered at the first symptoms of a financial problem rather than leave it to the last minute.
Beese Properties is a well established property company which offers all of the above. They look for the best solution for the homeowner and if the sell and rent back scheme is the best option they will base the rent on the current rental market in the area. For more information, visit them online at http://www.beeseproperties.com.
Beese Properties is a reputable company with a dedicated team around the country that will buy your home. For more information on a sell and rent back home visit http://www.beeseproperties.com.
Article Source: Tips on How to Sell and Rent Back Your Home
