Sell Option to Buy on New Build

walkerboh

A few months back i put my name down for a 2 bed dettached flat in a very popular new local development (Orsett, Essex) and we got the last flat with a garden on the plans. I'm expecting the phase containing my flat to be released towards the end of the year but am not really interested any longer as have just bought a bigger older house in different area for less money.

The thing is there is still a lot of interest in the development - the first flat of the type i have an option on was bought for about 169k and is now being sold a couple of months later for about 184k. I've had a couple of people say to me they would be interested in the flat but i obviously want to get something out of it to fund my first time buy of other house. Am i able to sell my option to purchase? Or would i have to find the money to buy and then sell on? (a lot more risk!!)

Any advice on whether can and if so best way of doing it is much appreciatted!

Altarf

What does the option agreement say? Is it transferable or restricted to the person named on it.

rizla01

This is, of course being done all the time by investors.

Have a chat with a financial advisor or mortgage broker.

I think that I'd be right in saying that you can proceed to completion (Paying the necessary stage payments, if & as required), and advertise it for sale so that the new buyer completes about the same time as you do. Your solicitor then uses THEIR monies to make the purchase and (after taking his cut - of course) pays you the remainder. This might be possible (Depends on how willing BOTH solicitors are) but officially you will need to complete before you sell.

You will need to speak to the developer and ask if they will give you access prior to completion in order to take people to view your property. It is entirely at their discretion thogh the show home may be good enough for your new purchaser plus a view of the plans for your particular property.

Don't be afraid of the developer objecting to the option that you describe. It doesn't matter to them and if they keep you happy they might get you back to secure another prop that you can make money out of. Win-Win situation.

Good luck.

walkerboh

thanks Rizla- will look into it.

In terms of the option type - have read all the small print i can see and nothing about it being transferable or not. It just says it is an 'Upfield Option'..

Debt_Free_Chick

the first flat of the type i have an option on was bought for about 169k and is now being sold a couple of months later for about 184k.

A few words of caution .... are you saying it's on the market for £184k? Surely, the only price you're interested in is the one it actually sells for. No guarantee that this seller will get the asking price. And then, no guarantee that you will get whatever this seller got. Whilst it's possible to make a profit in these situations, there is the risk that you will seriously lose out, especially if you complete on this property. Remember, you would have to pay the mortgage whilst it's onl the market and who knows what will happen to property prices between now and the end of this year .... there's an election to come, yet!

There's a complication with any choices you have on the finish, of course. You would need to choose the finishes and hope that the buyer likes them too. If you can sell this option, then the buyer gets to choose their own finishes.

Many options require you to give the developer first opportunity to buy back the property and usually only at the price you paid for it. If there's nothing in the small print, why not ask the developer. If they say "no" ask them where the terms & conditions prevent this.

HTH