Should I be wary of private sale?

homeworkgirl

I am forced to sell my house because of debts and was on the verge of selling to the best sell and rent back company I found. However, I have since received a verbal offer, subject to survey, from a private investor via an estate agent. It is a very good offer, very near the market value and about £30k more than I would get from the sell and rent back companies. However, my main priority is to rent back and stay in the family home with my daughter long term (indefiitely) following the death of my husband two years ago. I am worried about selling to this man as he does not think he could guarantee an indefinite length of tenancy. Also, this will be his first time as a landlord and I am afraid that he might decide its not what he wants a couple of years down the road and want to sell the property on. He sounds a reasonable guy on the phone and it wouldl be great if this went through but having read previous threads it sounds as if I would have more protection if I sold to a company. I would be grateful for any advice. I am meeting with him next week by which time I need to give him a decision, also the estate agents are putting a bit of pressure on me to decide.

Doozergirl

No one will offer you any security of tenure, hun. Not even the sell and rent back companies. You will be given an assured shorthold tenancy, that's it

For £30,000 more I know which offer I'd take.

G_M

the best sell and rent back company I found.

What guarantee do they give you of more than a 6 month AST? Almost certainly none. Words, maybe, guarantee - none.
Take the money.

zzzLazyDaisy

The sell and rent back companies can tell you anything, but the truth is after the initial term (usually 6 months, but maybe 1 year) they can terminate the tenancy and you have no rights whatsoever to stay on.

mwahaha

Echoing others. Yeah definitely go with the individual. He's only being honest when he says he can't offer long term security of tenure, the sell and rent back company would be the same. No one outside housing associations will offer more security that on any house since they would be unable to sell in future without a heavy discount. You'd effectively be giving them a 30k discount just for granting you a 6 month AST with no extra guarantee of stability for you and your daughter.

Just thinking here, may be crazy but..... Since it seems that security of tenure is important to you perhaps you could negotiate a condition of the sale with the individual that you get a longer tenancy (still AST) of 2 or 3 years? Probably you'd have to lower the price by a few thousand, so it may not make financial sense but could offer more stability. You'd also be committed to living there and paying the rent for that time so you'd also have to be sure. If you did lower the price at all for that there'd have to be no break clauses otherwise he could still gain possession and you'd have no real extra security.

homeworkgirl

Thanks so much for your replies. Re the rentback companies, i found two that give 100% guarantee that you will never be asked to leave your property, they say it is written into their legal paperwork and suggest that you get your Solicitor to look it over to confirm it. Are you saying that this could not be the case with any company?

Re the individual, I would prefer to deal with him, especially as he is very local to me, it's just that I am so worried about the security of the tenancy. We have been through such a bad time since my husband died and we just want to feel secure in our home.

Are there any Solicitors on here who could advise me re the long term tenancy problem? Is there anything that we could have written in the agreement to say we could stay in the property all the time we are paying our rent? Also, I understand that the rent would be paid to the estate agent and not direct to the buyer, would this give us any more protection?

Any help very gratefully received as I am under a lot of pressure to sell fast because of debt problems.

mwahaha

If you have their paperwork then the forums at landlordzone.co.uk would be a good place to ask for first impressions, a couple of good solicitors post there.

They're almost certainly creating 6/12month ASTs. Perhaps they are saying that they'll renew these provided you don't miss rent payments. If so what happens eg. when they sell the house to a third party, cease trading etc.

They could create longer term tennancies that do offer protection, but then they can't sell the house without a big discount themselves, so that's not how they work.

Obviously you need to sit down with a solicitor for proper advice if it's still tempting, but their '100% guarantee' almost certainly isn't worth 30k to you (that's effectively how they make their money!).

skiTTish

They may get around their agreement to never 'ask you to leave ' by simply increasing the rent to such silly levels that you have no choice?

googler

homeworkgirl wrote: »

Thanks so much for your replies. Re the rentback companies, i found two that give 100% guarantee that you will never be asked to leave your property, they say it is written into their legal paperwork

They can promise whatever they like, and you may keep up with your rent payments, but what if most/all their other clients default on the rent, the rent-back company goes into administration because they can't trade any more, and the administrator wants to sell your house so he can pay other creditors?

The rent-back company's promise will carry no weight then.

You'll be at the mercy of the rent-back company AND the reliability of their other tenants.

pawpurrs

I would take the extra money, and get a 12mth AST if you can, I dont think either way will be any more secure and 30k is a big difference.

Doozergirl

homeworkgirl wrote: »

Thanks so much for your replies. Re the rentback companies, i found two that give 100% guarantee that you will never be asked to leave your property, they say it is written into their legal paperwork and suggest that you get your Solicitor to look it over to confirm it. Are you saying that this could not be the case with any company?

Re the individual, I would prefer to deal with him, especially as he is very local to me, it's just that I am so worried about the security of the tenancy. We have been through such a bad time since my husband died and we just want to feel secure in our home.

Are there any Solicitors on here who could advise me re the long term tenancy problem? Is there anything that we could have written in the agreement to say we could stay in the property all the time we are paying our rent? Also, I understand that the rent would be paid to the estate agent and not direct to the buyer, would this give us any more protection?

Any help very gratefully received as I am under a lot of pressure to sell fast because of debt problems.

If you were given security of tenure, it would reduce the value of the property by around 40% and renders it unmortgable even with a BTL mortgage because the lender can never gain possession. It doesn't make any sense for the company to do that. The only person it benefits is you

It needs to be written into the actual tenancy agreement.

I'm very sorry for what's happened to you; presumably the debt situation is a result of losing your husband?