Sale and rent back is the commercial name for what is better known as sell and rent back, and this is an option that a variety of people within the UK have chosen, especially in today's financial credit crisis.
Whether the consumer is being repossessed, facing repossession, going through a divorce and doesn't want to move home or even retiring and wanting to release equity from their home, more and more people are now looking into the sale and rent back scheme.
Everyone seems to think that the sale and rent back industry is a new industry that has only just emerged due to the financial crisis, this is true for some companies, but there are a variety of companies that have been around for years. The Financial Services Authority (FSA) has just recently undertaken the job to regulate the industry due to research carried out during the first half of 2009, they are set to complete the regulation in June this year. This is great news for the professional companies operating within the sale and rent back industry, simply because those companies who have been operating unfairly will no longer be able to operate within the industry. Great news for the consumers also!
The consumer still needs to ensure that they select the right company to use, and unfortunately this is where you are on your own, to an extent. If you are looking to sell and rent back your property most companies generally offer between 30% - 35% below market value, there are a few vital things that you should look for when choosing a sell and rent back company. When you make contact with the company you should look for:
1. No call centres 2. Professional and knowledgeable people answering the phone 3. The individual should explain that they are part of the FSA 4. That they are the buyer and not just arranging the process and you end up selling to someone you have never spoken to before
And once you are taken through their process you should be looking for:
1. Security of a sale (i.e. how quick do they exchange contacts) 2. Detailed explanation on the term/length of the sale and rent back agreement 3. You should never pay more than local market rent 4. Is there a buy back option for you to purchase the property back 5. If there is a buy back option, does the company provide you any financial incentive The most important thing is that you feel comfortable with the company and also feel that you can trust them. This is a big decision and your property is probably the biggest asset you own, you need to feel safe knowing that the company you are about to embark on this lengthy journey with, is someone that trust!
Another important fact to remember, make sure if you have any further debts that you try to clear them, especially if you have equity left over from the sale of your home.
Get debt free and rebuild your financial position!
Steven Martin is a FSA interim authorised provider of Sell and rent back and also provides a Quick Property Sale. He works at http://www.quickpurchase.co.uk