Hi folks Currently selling our PPOR and have to move in a couple of weeks due to work reasons. Have found our next PPOR (always a danger buying before you sell!!) - the owner is happy with a rent now / option to purchase later scenario. Can you give me some options on how we could structure / negotiate this contract. For example should we negotiate the buy price now or in six months time (our preference)
Personally - I'd want to negotiate now. Waiting until you've been in the property for 6 months would seem to be giving the vendor an upper hand (you've already moved all your stuff in). On the other hand - buying later gives you the chance to live in the area for a while before committing to the purchase. It also gives you more time to sell your current place. Can you arrange finance shortly after your current ppor sale goes unconditional? Cheers Jamie
Do the rent now with option to buy and negotiate it all now. As its an option that means you arent forced into anything but you have the right to buy, but not the obligation. That's definitely good (and positive) for you, not so much the vendor. If your ppor fails to sell, or you find out that you don't like living there, you won't lose much, only the cost of the option.
I'd really like to offer a purchase price now but my finances wouldn't cover it I think - additionally we had a previous bad experience with a bridging loan.
Do it as an options contract, it gives you the right to buy without the obligation. Talk to a property lawyer for more info - it can be a powerful tool. And if the vendor is happy to offer it to you, you'd be crazy to not consider using one. (Most of the time the vendor wouldn't be ameniable to an options contract as they can't sell to anybody else and they don't have you locked in to buy either). It's all upside to the potential buyer, there's little or no upside to the seller, as long as you secure a price that isn't above (or much above) a normal sale price.
@ripas as You could negotiate a price now and go unconditional with a six month settlement. Then organise to go in under a licence agreement paying market rent until settlement.
