Hi Guys, been a while since I’ve been on the forum but figured it was the place to bring this question. We have had a house on the market for a short while with no nibbles, realistically priced, and tenant asks to be released from his lease. We understand his reasons and are ok with it, but have now taken the house back OFF the market to re-let. A family are interested, and mention they are saving for a deposit, pre-approved already to 220K (ours is priced 259K) but she has just started a new job. We suspect these could be potential buyers but don’t know how to approach them from that angle, OR the sale can be 220 with 40 following in 6 months?? They are a young couple with 2 little kids. We would prefer to sell rather than do a long-term wrap. Any suggestions?
Redhaven.
Hi there
If they have only been approved for $220K from their financiers then asking them to pay a further $40 in 6 months time maybe difficult.
Couple of choices:
1) Take the $220K now and then offer them say 60 months to repay the balance.
2) Suggest they talk to a mortgage broker to see why the reason the were only pre-approved for $220K. Remember if interest rates go up again inNov / Dec then their borrowing capacity will fall.
3) Look at a Shared Equity scheme with them hold 220 / 260 th of the property.Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner.
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Thankyou for your reply. The situation has changed (slightly) in that those people decided the repayments were above their means, but now we have another family interested in a rent/buy wrap. I just need to get time to sit down and find out exactly how to do this. I am not interested in pumping the price of the house up, or making a higher interest rate, I simply would like to bless this family with the ability to get into the market, while releasing us from the property. If you have any suggestions in the interim I would appreciate them. One of my questions is, obviously we do not use a general lease agreement for something like this. What DO we use?[blink]
Redhaven
Red
No you will require either a License to Occupy / Lease Option contract. The legislation will vary from State to State and you will need to find a Solicor au fait in preparing such a document.
Is going to cost a bit more than the average conveyance so make sure they are committed first.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner.
Ph: 07 3720 1888
[email protected]Richard Taylor | Australia's leading private lender
Hi
For legal wrap advice in QLD try David Barlow @ Bennett & Philip – Solicitors. 07 3229 0494. He can explain the legals for you. You may want to invest in educating yourself on the ongoing paperwork that is required for this type of transaction and what happens if the potential purchaser stops paying down the track.
Good luck
Red
I am sure that Bennett & Phillips know what they are talking about but Installment Contracts are a specialised area and we have found over the last 10 year of being involved in providing Vendor FInance that not all Solicitors understand the mechanics.
Ask them to provide you with a full cost of preparing such a contract as having done over 200 know we find that the costs vary considerably.
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
Hi Red
Bennett & Philip, David Barlow is up to date with wraps/installment contracts and other creative property stratigies. We have used him and his rates are very good for the knowledge he has in this area. Good luck.
Cheers
Anyone advise me what a warp is ?
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
Its similar to a wrap, but different in the middle – between signing and settlement.
Terryw
Discover Home Loans
Parramatta
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Just send me a blank email, with “subscribe†in subject line.Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thanks Terry.
Assumed it was a NSW thing.
Don’t think it has hit the Sunshine State yet !!
Cheers
Richard Taylor
Residential & Commercial Finance Broker.
Licensed Financial Planner. Ph: 07 3720 1888
[email protected]
Looking for life cover – We Guarantee to beat any quote you have in writing.Richard Taylor | Australia's leading private lender
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