A sell and rent back scheme involves that person selling a home to a property cash buyer for about 75% of it’s market value. Whilst selling a house in a falling market can take many months, this isn’t the case with a sell and rent back.
Sell and Rent Back can Stop Repossession
It is possible to get a quick house sale and stop repossession, provided that at least 25% home equity is available. It is even possible to stop repossession when there are just hours left to go. The availability of a property cash buyer means that the court is willing to intervene. The entire process will be handled privately and the neighbours won’t be aware of what has transpired.
A Quick House Sale at Below Market Value
Whilst a sell and rent back ensures a quick house sale, most property cash buyers will only offer up to 80% of market value. Those selling a house may be able to get a better price on the open market or even at auction. However, those selling a house won’t have to pay estate agent and legal fees. It is also argued that many estate agents bump-up valuations to entice homeowners into selling.
Sell and Rent Back Schemes and Money Problems
Homeowners regularly choose a sell and rent back scheme because a cash lump sum helps them to clear personal loans, overdrafts and credit card bills. The removal of money problems and the provision of a lower monthly rent can make life more affordable for families.
Regulations and Assured Shorthold Tenancy Agreements
There is currently minimal regulation with respect to sell and rent back schemes. This means that different companies have varying terms. Whilst some property cash buyers are looking to establish long term relationships with tenants, others choose to invoke assured shorthold tenancy agreements. This could mean that a tenant is removed from their home in as little as 6 to 12 months.
A sell and rent back scheme is an excellent way to stop repossession. Anyone facing repossession should seek a property cash buyer, provided sufficient home equity is available. However, homeowners that aren’t in immediate financial peril should seriously consider selling a home on the open market to get a better price.
Those struggling to prevent property repossession should check to see if they have an unlawful mortgage agreement. This could mean that a homeowner is entitled to compensation or even the write-off of the full debt in certain circumstances. This also applies to illegal loan agreements and unlawful credit card agreements.