Sell and Rent Back plus Buy Back
The sell and rent back business model has changed
considerably during the last 20 years. For some time these businesses
were created solely for the purpose of making money with inadequate
thought for the plight of the homebuyer. Fortunately, this has now
changed considerably and the businesses are concentrating much more
on the needs of the customer. Today those businesses that were not
entirely focussed on offering the best possible solution to their
customers have, in the main, ceased to exist.
Sell and rent back plus buy back is a development
created by investors to offer the best possible options to homeowners
who have met with temporary financial problems. The idea is to offer
the homeowner the opportunity to sort out his/her debts avoiding repossession
of the house and to give him/her the opportunity to rebuy the house
at a later date. The investor would buy the home and then rent it
back to them with a big plus, that being the right for them to buy
it back at a future time on agreed terms.
When a homeowner becomes trapped in debt and is unable
to meet his/her mortgage repayments, the sale of the house is often
the only way to exit this situation but this involves considerable
disruption. The sale and rent back plus buy back scheme offers the
opportunity to do this without any disruption and also retains the
right to rebuy the house at a later time if that is the wish. The
aim is to sell the property, pay off all debts, provide rented accommodation
in the same house without having to move and then to give an option
to buy the property back at an agreed price when the personal finances
of the tenant have recovered sufficiently to allow this.
Generally the investor will give the howeowner between
3 to 5 years to buy the property back but the terms of the sell and
rent back plus buy back option can vary according to individual circumstances.
Contact Beese Properties to discuss the individual circumstances is
recommended.
One question often asked is "if a homeowner cannot
pay his/her mortgage how can he/she pay the rent?" This was a
concern for some investors but usually the mortgage repayment is much
higher than the rental market value of the area local to the property.
Furthermore, depending upon the amount of equity the property has,
a homeowner may have a capital injection sufficient to put him/her
back on track.
Homeowners also have some concerns like, for example,
"if the property prices rocket again how will they find it possible
to buy the house back again?" The answer to this is that a pre-agreed
price for the future purchase is written into the agreement. Most
investors buy the property below market value but also agree a below
market value for the sale back. The bottom line here is that the cheaper
the homeowner sells the property then the cheaper the pre-agreed price
to buy it back. As an illustration if the homeowner sells his/her
house with an agreed buy back price of £100,000 then this is
the price that he/she would pay under the option even if the market
value had soared to £150,000 at the time of repurchase. If the
value had dropped below £100,000 the tenant can choose not to
buy but continue to stay as a rent paying tenant. The sell and rent
back plus buy back scheme always works remarkably well for both parties
because the investor is in this business for the long term.
Troubled homeowners may well ask "is the sell
and rent back plus buy back option a safe way for them to go?"
The answer is that this is a creative solution to avoid an inevitable
repossession which will lose everything and which at the same time
gives the homeowner the opportunity to rebuy the house, on pre-agreed
terms. When things get better and it is all guaranteed by a legal
contract. The homeowner's solicitor will advise at the outset on the
advisability and acceptability of these terms.
If you consider it, in most cases the name homeowner
is misleading. The real owners of the property are the banks or building
societies which made the loan to buy it and if the necessary repayments
to service that loan are not made regularly then the borrower may
well forfeit the house and all its value and be evicted into the bargain.
Not a very happy situation! So enquiry into the sell
and rent back scheme, with or without the buy back option, is
most definitely worth a try for those people who have this problem.
Sell and rent back plus buy back is a second chance
to keep your property and avoid repossession. Unfortunately, thousands
of homeowners were repossessed last year because they were either
too frightened to try this solution or were simply not aware of its
existence. They were unable to keep the roof over their heads because
the real owners of the bricks and mortar came to claim their ownership
after the failure of the borrower to meet the contractual obligations.
Before this happens to you, contact Beese Properties to find out more
about sale and rent back. It has the potential to save you a great
deal of pain and grief if you find yourself in this position.
