Shared Ownership Confusion over selling on open market

beammeupscotty

I own a shared ownership property - I own 70% and the housing organisation owns the other 30%. I wish to sell the property and have been told by the housing organisation that I can put it on the open market as they failed to find a buyer. What is confusing me is that they say I have two selling options -

1. Sell my share.

2. Sell 100% via 'staircasing and onward sale'. My understanding of what happens here is that the buyers money is used to temporarily purchase the rest of the shares in my name and then the property is transferred from me to the buyer on the same day.

My feeling is that the second option will attract more buyers however I have some worries about how this would work, this is where I am hoping someone can help! I can't seem to find out anything about this online or find anyone thats done this before!

Q1. Do I have to tell the buyers that I only own 70% and explain how it will work? if so then i think this would put people off.

Q2. Can anyone shed more light on how this sale actually works on the day of completion?

brit1234

I have known that shared ownership is far harder to sell but looking at your situation it looks even more unlikely as you have 70%. I would say most purchasers would want a smaller percentage. Also 70% of a shared ownership property is the equivalent to 100% of a normal property so you are likely to have even less buyers.

Can the HA buy some of the shares back making it more attractive to buy?

Richard_Webster

Ned to check with your solicitor as to whether you can sell 100% back to back. Some SO leases have a provision which can impose penalties on a buyer if he buys within 3 months of you buying in the final share.

The actual transaction is a matter of synchronisation with the HA's solicitors which your solicitor will organise. You do have to watch that the HA will want 30% of what it's valuer thinks the value is which might be more than 30% of what you sell for!

If you can do a back to back transaction then you don't need to tell your buyers the details because it is all legal stuff your solicitors will sort out - obviously a 100% sale will be for normal market value and therefore easier to sell on the open market.

beammeupscotty

Thanks for this. I agree with brit1234's comment about it being difficult to sell the 70% - for people who want shared ownership, the majority only want to purchase between 25-50% to start off with. This is the reason that the 100% sale method seems like a better option for us.

I have checked and we can definately do the back to back transaction, the housing organisation have given me an instruction form that authorises me to do this and my solicitor has said they can support this type of sale. Thanks to Richard Webster for his last comment as my main concern was really whether I need to tell the buyers about the background, because my fear is it will just sound complicated and put people off!

I am going to go ahead with the 100% sale and let you know how I find the whole process (will hopefully help other people who end up in the same situation).

Thanks for your posts.

geoffky

good luck and remember normal sellers are struggling to sell so you may be on the market a while..