100% of Market Value?
Nov 13th, 2008 | By admin | Category: 100% Market ValueSTOP PRESS: UPDATE May 2009
Since I wrote this article the housing market has changed dramatically. I warned sellers against the dangers of sell and rent back companies offering 100% of market value. Sell and rent back simply cannot work when the buyer pays 100% market value for your house.
I still maintain that you will not get 100% of market value if you are looking to sell and rent back your home.
However, I have now developed a system of purchasing that mean I CAN pay you your asking price, BUT this is only for normal property sales, it will not work for any kind of sale and rent back.
If you would prefer to get the maximum price for your home instead of losing out on 20-40% of your equity, or if you are facing low or negative equity then this may be a possible solution for you.
100% of Market Value? Not Even Normal House Buyers Are Paying This in a Falling Market
Don’t be conned by companies claiming to pay 100% of market value for your home. This is an old trick and one that I have discussed in my PDF report about Selling and Renting Back Safely.
Why would anyone spend £000’s advertising on TV, online and in national and local newspapers to then pay market value for your home?
Any buyer can walk into any estate agents and pay full market value without spending this money on advertising. So we need to ask ourselves why any company that needs to make a profit would in reality be prepared to make a loss?
They are not of course (read the PDF to find out how and why).
But now with nearly 12 months since the collapse of Northern Rock and house prices falling dramatically in the UK, even those normal buyers looking for their next home are not paying 100% of ‘market value’. Figures published this week show that sales are now completing at 89% of asking price. These figures are national. Homebuyers are simply paying less.
Compare this to 98% 18 months ago and you can see that even selling via an estate agent in the traditional route it is currently practically impossible to sell for full price. Buyers simply have too much choice.
Why would a buyer need to pay top dollar for your property (however nice it may be) when your neighbour facing repossession is prepared to sell for 70% of market value?
If this is true of normal family home buyers, then it’s even more so in the case of cash property buyers and investors. There are literally thousands of people offering to sell their homes for less and less in order to avoid repossession adn the threat of bankruptcy. This makes it harder for everyone else needing to sell (including those same investors who may have properties for sale – everyone is similarly affected by this credit crunch!)
Your options for a quick sale in this current market are simple.
1. Don’t sell. Wait until the market has recovered, sell via an agent and make the most money. This of course may take 2 to 5 years, but if you don’t need to sell then this should be your best option
2. If you really do need to sell (if you are facing repossession, mortgage arrears, etc) then you must be prepared to sell well below market value in order to secure a fast sale.
If you need to sell and rent back or simply need someone to cover your mortgage costs then fill out the short forms here
