Can I trust a property agent?
(Home Counties, UK)
We want to sell our house to retire abroad but our buyer pulled out. Since then the market has slowed and we have had few viewings but no offers. A property agent has visited us and has offered over and above our asking price. The way this works is that he agrees to buy the property with a view to letting it for a fixed term and we agree a fixed length of time for the agreement to run (for example 5 years). In the meantime we still have to pay our mortgage which has 5 years to run and he pays us an annual income of approx £10,000 payable monthly (as he estimates he could let our property for £1,500 a month). When the 5 years is up he gives us the balance of the agreed price and on the face of it it seems a win win situation. He assures us that everything is done legally, so why am I so suspicious? If a thing seems too good to be true it often is. Can anything go wrong with the biggest asset we own. We own our property abroad and have two small company pensions but we do need a small additional income from the interest of our home sale. We do not reach retirement age for another 5 years. He tells us that we would get more income his way than if we sold and invested the money in a building society or bank. Would welcome any comments or advice. Thank you.
Reply: Mary, There are a number of innovative ways in which buyers / agents can create a legal solution other than outright purchase. These include stage payments, and option agreements.
However one of the problems is that these can be highly specific in their detail. Most agreement offering to buy a property in the future take the form of an "option" to buy. This means that the buyer may choose not to buy your property.
It is hard for us to be specific without seeing the proposed agreement on paper. I would strongly suggest you ask for a copy of the agreement and take it to specialist property solicitor. This is unlikely to be a conveyancer or family solicitor.
I would also suggest you look into all eventualities such as what happens if the agent dies or goes bankrupt before the five years are up.
I hope this helps.