What is an assisted sale, and how can it help you sell your house

What is an assisted sale, and how can it help you sell your house?

If you are looking to sell your house quickly, using the services of an investor or an assisted sale company might be the best way to go. If your house has been gathering dust on the market for some time now, getting an investor or a house buying and sale company to assist with the sale might also be the answer.


Not all houses move quickly on the market. While most UK homes take about 18 weeks to sell, it depends on market conditions, the price, solicitors and estate agent competency, etc. For example, in ‘hot’ market conditions, houses can sell under 15 weeks, while in ‘cold market, it can take up to 25 weeks to sell.


If you don’t want your house to turn into a stale listing, sitting on the market for long, you can hire the services of an assisted sale company.


What’s an assisted sale scheme?


An assisted sale scheme is where property owners sell their property through an investor or an assisted sale company at a guaranteed price, usually the house’s market value. An assisted sale scheme can help you part with your property quickly.


How does an assisted sale work?


In an assisted sale, the investor or company guarantees a price and delivers a cash payment of the portion of your equity in the home, with the rest to follow after the final sale. The investor assumes responsibility for selling the house and does everything to get an offer; if they fail, they won’t ask for the cash advance back; instead, they absorb it as a loss and close the book.


An assisted sale is ideal if you have an active mortgage on your house. Until the final sale, the investor assumes responsibility for the mortgage on your house, with permission from your mortgagee, of course. Your solicitor must prepare a legal contract to support the assisted sale.


Assisted sale option and the pros and cons of each


Assisted sales reduce stress or any extra costs of selling a house on the owner’s part, and you can walk away without wasting much time. For homeowners looking to sell their house using assisted sales services, you have a few options. Here is a look:


1.   Using the lease option


As a property owner looking to sell, can sign a legal contract, now, with an assisted sale company or an investor as the property �buyer.’ The contract gives the investor the right to buy your house between now and a later date, at a predetermined price. The agreed future price is also known as the ‘strike price.’ After the contract is signed, the investor advances the owner some cash as a fee for the option. The option fee depends on your stake in the property and cannot be less than £1.


Why use a lease option to sell your house?


There are several reasons to choose a lease option over other forms of assisted sale; here’s the breakdown.


·   Speeds up the sale: preparing and executing a lease option is easy and fast. A lease option is especially beneficial when you want to get out of missed mortgage payments or a repossession fast. It’s also great for selling just a house in any condition fast.


·   The investor assumes responsibility for your mortgage, insurance, and utility bills associated with the house. They will also be responsible for repairs, upkeep, and council taxes.


·   Property can sell at prices above their current market value: premium sales are possible with a lease option; this can be included in the contract agreement.


Disadvantages of using a lease option


A lease option is now without its drawbacks; here is a look at the negatives:


·   Additional stamp duty cost: to regulate the real estate market, second property purchases usually incur 3 % extra stamp duty charges. This extra charge is usually included in the options fee.


·   You may need permission from your mortgage lender: the lender may require assurances that the investor will keep up with mortgage payments.


·   Some solicitors aren’t experienced in lease options: of course, solicitors play a crucial role in property sales; they draw up contracts and facilitate quick agreements and sales, but if your solicitor is not experienced in lease options, selling the house will be difficult.


·   Even if you won’t be responsible for making the mortgage payments, the amount will be deducted from your share of the sale, eventually.


 2.   Cash advance


An assisted sale with a cash advance is structured just like a lease option but with a short final transaction timeline. In a lease option, the investor pays the strike price, takes over the house, and assumes mortgage responsibility at a specified future date. On the other hand, an assisted sale cash advance delivers some cash now, depending on the property’s agreed estimate, minus the outstanding mortgage.


Why use an assisted sale with a cash advance option?


There are a few benefits of opting for an assisted sale with a cash advance option; here’s the breakdown:


·   Fast sale and pays most of the equity in advance: unlike a lease option, an assisted sale with a cash advance option has a shorter transaction timeline and pays a big part of your stake in the house in advance.


·  The investor takes over mortgage payments; the investor assumes responsibility for the outstanding mortgage payments between signing the contract and the final sale when part of the proceeds goes to settling the mortgage entirely. They will also be responsible for repairs and upkeep, insurance, utility bills, and council taxes.


·  It helps sell a house with damp or any other problem fast.


What are the disadvantages of an assisted sale cash advance?


There are disadvantages to going with the assisted sale cash advance option. These include:


·   Ultimately, the buyer is responsible for the mortgage: the investor deducts from your sale profits to compensate for the mortgage they paid on your behalf.


·   Extra stamp duty cost: you incur a 3% extra stamp duty if you buy a new house before the lender sells the first; this stamp duty is reclaimable once the old house sells.


·   Mortgage lender agreement: you may need consent from your mortgage lender.


·   Solicitors don’t understand assisted sale and may bungle up the contract.


3.   Assisted sale no cash advance


This form of an assisted house sale offers no cash advance except for a £1minimum option fee, so the contract becomes legally binding. Usually, the investor will require the owner to move out at a moment’s notice; it works better if there’s no outstanding mortgage. Still, you can use it to sale a home in any condition, faster.


Why use assisted sale with no cash advance option


There are several reasons why you might want to use an assisted sale with no cash advance; here’s a look:


·   If your house is empty and needs a few updates or modifications: you can use the option to sell a probate house that needs some modernisation instead of offering it to a builder for less. That way, the investor can fix it before the final sale, guaranteeing the best value.


·   No stamp duty charge until the final sale: the investor will draw up a contract document taking control of the house, but the ownership won’t change until after the final sale, so no need to charge you the 3 % stamp duty fee until the final sale. But when you sell to a builder, they will undoubtedly factor in the stamp duty fee at the moment.


·   Increase your profits in the sale: You only put the property in the market, and it’s the work of the investor to fix and update it, so it attracts a higher value. That means your profit in the final sale increases too.


The disadvantages of an assisted sale no cash advance


An assisted sale with no cash advance has the following potential disadvantages:


·   The owner has to wait for cash: investors withhold cash until the final sale after fixes and updates have been made.


·   The additional 3 % stamp duty is still your responsibility. the good news is you can reclaim the tax expense of the house sales within two years.


 4.   Builder’s assisted sale.


You can also use a builder’s move scheme to sell your property fast but must agree to buy a new house from them. Builders and developers have such schemes to help owners sell their houses quickly so the builder/developer can sell off another house on their development.


Advantages of builders assisted sale.


Property owners who are for builder’s assisted sale loud the following benefits:


·    Fast sale: in most cases, selling a house with a builder’s help usually takes just six weeks.


·    The builder/developer coordinates with your estate agent for a quick sale: assisted can work with your estate agent to value the house and may even offer to take care of the agent’s fees.


·    It allows you to select your new property with the builder/developer: this is usually done at the start of the process, and the selected property will be reserved for you for about four weeks.


Disadvantages of getting the help of a builder or developer to sell your house


There are a few disadvantages of builder assisted sale schemes; these include:


·    You have to buy a new home from the developer or builder offering to move your house.


·    The builder offers a lower amount for the home in case repairs are needed.


·    Builders and developers usually offer below market value to maximise profits.


Are you looking to sell your house using the services of an investor or an assisted sales company? We can advance you a portion of your stake in the house, in cash, and assume the responsibility of selling your house faster. Assisted sale services are for any house, no matter its conditions. Give us a call today to discuss the sale of your house.

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