Beware Sell & Rent Schemes Offering 100% of Your Property Value

We’ve been so busy since the New Year dealing directly with those facing repossession that there has been no time to update this blog.

However, a recurring theme of many conversations with those facing home repossession has been ‘Should I deal with Company X who are offering me 100% of the value of my property?’

The answer is NO! It can only be no!

Sell and rent back schemes can sometimes offer an answer, but the companies who offer to pay 100% of the market value for your home are hiding something very important.

The reality is that you will sell your home for as little as 50-60% of it’s value and be left homeless, if not sooner, then certainly later.

How come? Surely if they pay 100% that’s what I’ll get?

Again the answer is NO!

These companies will pay you at the point of sale 50-60% of the value of your property. Very often this is just whatever it takes to pay off your mortgage redemption figure.

They will promise that you will receive the remaining 40-50% in 5 years’ time (one company we heard of was quoting 10 years) PROVIDED that you remain renting for that whole period.

‘Fine’, we hear sellers say, ‘we want to sell and rent back for years.’

Only there is a HUGE catch.

Anyone who thinks that these property buyers will ever pay them the remaining 40-50% is dreaming.

Legally, all the landlord has to do is terminate your tenancy agreement (or put up the rent to a point that you can’t afford to pay and stay) BEFORE the 5 or 10 years is up, and then you will no longer qualify for the final payment.

The result? You have sold your property for very little today on a promise of more tomorrow, and that ‘more’ will never materialise.

So what is the alternative?

If you are considering a sell and rent back option you need to evaluate what you are being paid today for your home.

  • Does it cover your mortgage?
  • Does it leave you with any cash left over?
  • Is the rent affordable?

The only guaranteed thing when you sell your home to rent it back is the price you are paid today.

Avoid any scheme that promises to pay you more in the future!

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