How to sell fast with little equity, or lease option?

jordanski

Hi all

Our dilemma is this. My wife starts a new job in January, and as it's beyond commuting distance we have to move. Ideally we would sell our current property and buy a new one (already have several properties lined up and mortgages are all ready to go, just the sale of this place left).

Our current property if sold through normal channels would get enough to cover the outstanding mortgage, and that's gutting but fine with us. But it's the speed of any sale going through that's of concern.

I contacted the buy-it-now companies, but as they would offer less than the outstanding mortgage they can't help that way. However, some did mention a "lease option".

I've looked online for some independent advice / info on this, but can only find details about it on the companies websites, so not very independent.

Does anyone have any info on these schemes? Things like: Will my current mortgage provider accept this? Do I need to change it to buy-to-let? Will it stop us getting a new residential mortgage for new house? Will they really buy the house off us in x years time? What happens if the company goes bust?

It's a lot of questions I know, but I could really do with some advice or be pointed in the right direction.

Thanks for taking the time to read this and also for any help offered.

Graham

mlz1413

Hi I don't know the answers to your questions but agree all are valid points and ensure any answers you get from the co's are in writing.

But just a few thoughts can you wife get lodgings near job and travel back for weekends? Not ideal but many people do spend 4 days a week apart and in your situation it is only short term until the house sells.

Can you rent your house out (with lenders permission) and rent near wifes job? This mean you are together and your current house is paying for itself (hopefully) whilst you settle in new area. Use an agent if you are not local.

Also you are moving to the area of the job is it guaranteed that she will make the probabtion period and that she will like the job and stay there?

Otherwise can you afford to repay the neg equity to allow sale of current house and then rent in new area until you find somewhere you want to buy?

jordanski

Thanks for reply

Although a good idea in principle, being separated for a few days is a non starter. Got a young child, so if I tell my wife that one, I'll be the one looking for lodgings!!!

Just contacted current lender, and yes I can! Never knew that was possible. Thought if I wanted to rent out I'd need a buy-to-let with a ridiculous deposit. This is a very good option to consider...

It's the same job she's doing (teacher), just with more money. She's been doing the job for years in various schools.

Don't have any funds to pay off shortfall. They're currently in this house.

Think I'll investigate the rental market a little bit more. Hmmm... :undecided

Thanks again.

GDB2222

Just a word of warning. It's really difficult to sell a property that you are renting out. See some of the rants here about 'my landlord is trying to sell my house'. So, if you go down the rental route you'll be pretty stuck with that for quite a while. If prices go down again, you'll be really really stuck, so it's quite high risk. Don't forget that there are a lot of outgoings that the rent needs to cover, not just your mortgage interest.

Also, don't trust the buy-it-quick companies even a little bit!

goldbyron

GDB2222 - why do you say don't trust the buy it quick companies. I am considering this if my flat doesn't sell in the next 3 months - what can go wrong?

GDB2222

goldbyron wrote: »

GDB2222 - why do you say don't trust the buy it quick companies. I am considering this if my flat doesn't sell in the next 3 months - what can go wrong?

I suggest you do a search on these forums.

Bermuda_John

goldbyron

there is nothing wrong with the majority of fast house sale companies, if you really are desperate to sell. I f you are not then dont bother even contacting them.

I make it clear from the initial contact that the offer wll be a mutually benificial one, you get a fast, guaranteed house sale in as little as 28 days and I get the house at between 75% and 85% of the true value of the home.

If you are unwilling to agree on these terms then it saves us both a lot of time at the outset.

Beware, some firms do try to pull a fast one and change the price after "their surveyor" reports some problems etc. It would be a good idea to insist that you employ your own surveyor .... dont cost that much and they will be acting for you and the house buyer can employ their owna nd see if they both come up with the same issues!!

I am open to even taking the surveyor fee that you incurred off the purchase price, some others wouldnt dream of it.

Itdepends who you deal with.

Good luck with the house sale

Bermuda_John

lease options are good on paper but a little more difficult in practice.

1. they arent legally enforcing, ie you can turn up in court in 4 years time and tell the court you had no idea what you were getting yourself into and it will be void.
2. you will need a 2nd charge on your property for the option to be of any value, most mortgage co's wont allow it. The option holder willl therefore place a note (UN FORM) on the land registry which says there is a third party interest if you tried to sell it wihtout the option holder knowing. You then revert to point 1 to tell them where to go if you really want to.
3. the uk market isnt particularly familiar with them
4. the option maybe assignable and the option owner can sell his option without your consent so you may actaully have "sold" the property to someone who you have no clue about
5. they may not take up the option and you are left with the house

these are the problems from both sides

one way to get round point 1 is to make sure both parties appoint a solicitor and the 2 solicitors sort out hte option and both parties to the option then sign. Point 1 will then not stand.

marcg

Are you looking to sell at discount from market value? If so, put it to auction. Buyer's put 10% down on the day of the sale and have 28 days to complete or they lose their deposit. In terms of making sure the sale covers the mortgage then set an appropriate reserve.

Milliewilly

Auction houses won't let you enter your property if the reserve is too high. The fees are high too compared with trying it cheap at an estate agents. The only benefit is if it sells you know it will be done in 28 days or you get to keep the deposit!

bitsandpieces

goldbyron wrote: »

GDB2222 - why do you say don't trust the buy it quick companies. I am considering this if my flat doesn't sell in the next 3 months - what can go wrong?

If you've got that amount of time to spare, why not market at a fair price now and then drop the price to 10% or so below market value when you're needing to sell within a month or two - still a fair bit better than you're likely to get from any 'buy it quick' company, and selling well below market value should help get a quick sale on the open market.