Help, I Can’t Sell My House

There may be lots of reports of a turn in the housing market and prices starting to climb all over Britain but the reality of those people in financial difficulty is that they still say ‘I can’t sell my house’ even though there are now hundreds of property companies trying to buy them. This is because most of these property companies don’t really buy houses at all they are looking for option deals. Option deals are thought to make some people’s life easier whereby the savvy investor takes a lease on the homeowner’s property for a predetermined time say ten years. During this period the investor pays the homeowners mortgage as if he still owned the house, rents the property to a third party and pockets the difference. When the period is up the investor gets the choice of buying the property for the figure it was worth ten years before or can hand it back to the owner and wave bye bye. Now this might seem like a solution to create a win win scenario for the homeowner (many of whom are landlords themselves) but has yet to stand the test of time. Where the property is someone’s home and they, (possibly a family) have then to go into rented accommodation, there could be very different problems further down the line which many unsuspecting people have yet to discover, as their greed to have more has driven them to take on properties and deals that themselves could be circumspect.

 

This week we have seen a court case for the second leg of just such a deal that has gone bad. The costs requested by the claimants are already over £16,000 and the Judge warned that a more pragmatic approach may be necessary as he awarded possession of the property back to the original owner. This means that the lease option agreement was null and void as it never legally existed. Neither is this the first case of its sort to end up being legally challenged and another case ended with a claim of £48,000 so the question is when somebody says I can’t sell my house do they want to sell it or have it taken from them? Nobody wants to give away all that they have and even if it seems as though they are getting a good deal at the beginning will they feel that same way, three, five or seven years down the line when they want to have the cake they have already eaten? As a practice it would seem sensible to put a notice clause into each contract, so instead of it being stacked one way in favour of the investor the poor homeowner who might have been in a very vulnerable position can have the chance to get their asset back and try again even if it means the investor doesn’t get the full value of the buying option as he would have had all the on-going cash flow.

 

Whenever we look at a property deal where somebody says anything like ‘I can’t sell my house’ surely we have a duty of care towards that person to help them the best way we can? Not try to make as much from a deal as possible. Being fair to all and sundry is a far better way to live than being ego driven to show off your next materialistic purchase to impress your neighbours. Few people realise that real friends are not impressed by what you have, and generally the people you seek to impress are not concerned by it either. As we look to set up events for property investors we want to ensure that we help those people who will help themselves by helping other first. Looking at everything from a charitable point of view helps the person who gives far more than the person who receives. Any of us could be in a position where we would need the help of another; to be taken advantage of during that situation is not a good place to be. The world can be a harsh place, even here in the West where we should be able to appreciate everything and be grateful for all that we have. The value of a decision depends upon the courage required to make it.  All direct property investors should be self-determining in their power to help others not to make a fast buck.

 

Our upcoming events will be more like property connections than the usual networking we get over and over again. The aim is to use experienced people to talk through deals and opportunities, to create a self-help clinic for both long-term and novice property landlords and investors to find the best way forward for all concerned. Too many people in this business are spouting off about what they can do and what makes them a fortune. One person’s strategy will not fit another person’s wants, needs and desires and yet we all have to listen to everybody on the circuit telling us their way is the best. We like to suggest people take a rational view of everything. There is a Buddhist saying which states: Believe nothing no matter where you read it or who said it unless it agrees with your own reason and common sense. It hangs on the wall in my office as a permanent reminder that so many people are simply not genuine in their thoughts, words and deeds which is detrimental to everyone else in the same business. We could never enrich the thinking processes of the people who get themselves into such financial difficulty that they have to sell their house, but we can try and educate those who should be able to do better for others. I wouldn’t like it on my conscience that my greed has caused another’s hardship but trying to explain ethical behaviour to ego driven people is a tough hill to climb.

Always look to do the best you can for all parties concerned.

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