Making a post-sale agreement with the Vendor

tsf1968

Hi

We're interested in a property, but we're sure that it's over-valued by the vendor. It's a pretty unique property with no similar local properties or historical sales to base a valuation on. The pool of buyers willing to take it on will always be very small.

We don't want to "overpay" as we expect to sell the property at some point and don't want to struggle to recoup our investment.

The vendor is set on their price and won't shift at the moment.

So.. is it viable to arrange an agreement with the vendor, that will set their mind at rest regarding the value of the property. E.g. We buy the property at 50K below their asking price, but we agree to pay the vendor the first 50K of any upside when we come to sell?

Or is there some other profit sharing deal that can work in these situations?

Maybe we should be a bit more patient and wait for the vendor to get desperate!

stator

I don't know, but if you did come to sell it and house prices have gone up by £50k, you'd be £50k short of a new house.

pinkteapot

That'll get pretty complex and increase your legal costs in getting agreements drawn up, even if the vendor goes for it. Your mortgage company wouldn't like it either as the vendor would have a charge over the property, and mortgage companies won't normally accept second charges.

Some vendors just have a fixed price in mind and there's nothing you can do about it. You either pay it if you really want the house, wait to see if they change their mind, or look at other houses.

If you're thinking about resale, don't buy a property with such a small pool of potential buyers. Those are properties to buy because you love them and want to stay in them for a good amount of time. If this is a shorter-term home that you'll want to sell, buy something with mass-market appeal.

ellie27

But what happens if when it comes to you selling it on, the value of the property has dropped by £70k?

Would that mean the seller would get nothing?


If I was the seller I would not be happy with any agreement like you describe.

-taff

I can't see any potential vendor agreeing to maybe get 50k in the future. Anythin could happen, you might not sell it, you might not find a buyer, they might die etc etc.

KRB2725

If the property is overvalued, you are just delaying paying too much money for it!

If is is overpriced then it is unlikely to sell unless somebody is intending to stay in it for a long time.

When we purchased our house, we put in an offer that was just shy of 20% lower than asking. It was refused so that was that. Two weeks later they phoned to see if our offer still stood...

societys_child

So you want to buy at 50k cheaper and promise to pay it, maybe, sometime, in the future, if you sell and make enough to enable you to do that . . . sounds like a 50k loan

Can't see anyone going for that.

mrginge

It's a ridiculous idea.

Sorry.

Foxy-Stoat_3

tsf1968 wrote: »

The vendor is set on their price and won't shift at the moment.

So.. is it viable to arrange an agreement with the vendor, that will set their mind at rest regarding the value of the property. E.g. We buy the property at 50K below their asking price, but we agree to pay the vendor the first 50K of any upside when we come to sell?

Or is there some other profit sharing deal that can work in these situations?

I know its your first post, but are you for real?

Effectively you are asking for an unsecured loan with the vendor of £50K with no interest payable if/when you sell assuming that you get back what you paid for it + £50K + fees.

sinizterguy

If I was the vendor, I would not agree to it.

Errata

Do talk this through with the vendor. They're probably stressed cross eyed with trying to sell their property and in dire need of a good laugh.