The sale with right of repurchase is accessible to the general public and has been in existence for more than ten years. Nevertheless, this form of sale is little known despite the fact that it is favoured by a large number of investors. If you are interested in it, it is important to find out in advance about the conditions necessary for its implementation. This article will help you learn more about the principles and conditions of sale with a repurchase agreement.
What is a sale with a repurchase agreement?
It is a real estate investment that allows an owner, regardless of age and income, to temporarily sell his property. More precisely, the owner has the option to sell his property and buy it back at the sum agreed in the initial contract. The period of the possibility of repurchase is also governed by the initial contract. This method is widely used by companies and third parties with financial problems, especially those who wish to collect debts. By opting for a sale with a repurchase option, the owner can return to a normal life and a stable financial situation within just a few months. For those who wish to learn about the sale with a repurchase agreement, it is possible to call on professionals in the field. They are responsible for following and accompanying their clients in all the necessary steps. However, the sale can be carried out without an intermediary, i.e. without going through professionals, but this is quite risky.
The stages of a sale with a repurchase agreement
The procedures of the sale with right of repurchase are simple and fast. The first step is the filing of the owner’s application to an intermediary of his choice. The latter, i.e. the specialised agency will then assess the financial situation and the value of the property to be put up for sale. Then, some agencies propose a simulation which will allow the owner to have more details on the sum needed, the indemnities, the time limits, etc. of the operation. Following this simulation, the owner can now proceed with the search for funds. This is one of the most important steps in the sale with right of repurchase, as it will make it easy to find investors interested in the owner’s offer. Then comes the stage of signing a contract. This must essentially include the occupation clauses, the amount and the duration of the sale with a repurchase agreement. Finally, the last step is to buy back the property at the price indicated in the contract.
The conditions for carrying out a sale with a repurchase option
As a temporary sale of a property, a sale with a repurchase agreement allows sellers, who have an immediate need for money, to fully repay the debts that weigh on them. This mainly concerns the recovery of unemployed credit, or any other credit granted because of financial difficulty. The conditions for carrying out a sale with a repurchase agreement are based on the eligibility of the owner. Firstly, the seller must be the legal owner of the property to be put up for sale. To be able to buy back his property, the owner can have recourse to a financial credit from financial institutions. Depending on his situation, the seller can apply for an unemployment credit or a senior loan in order to recover his property. However, in some cases, the owner may have to face a refused credit, i.e. a refusal of a bank loan. This is due either because the person has already applied for too much credit or because the credit applied for is too large in relation to the person’s profile. Thus, the owner is obliged to sell his property definitively to investors.