ᐅ Buying a house when the seller requires a right of residence – How to handle it?
Created on: 23 Oct 2018 12:48
N
NeueWelt
Hello,
As you may have seen in my other thread, my partner and I had very bad luck with the real estate agent/seller during our last attempt to buy a house.
Now we have another house in mind.
Nothing is set in stone yet; we just want to gather some information in advance.
It is important to us to have a fair and smooth process for both parties.
The situation:
The seller wants to sell his house because he is building a new one. The new build will be finished in summer 2019, so he wants to stay in the house with his family until then. However, the money from the sale is needed now (payment of the purchase price next year is therefore not an option).
There are definitely different possibilities. I am open to all ideas. Currently, I have the following concept:
We buy the house and register a right of residence for the seller until next year.
He would pay us a rent equivalent to our loan installments (interest + principal repayment).
We would prefer to avoid paying double costs from our regular rent and loan interest and/or principal repayment over so many months.
Does this approach make sense?
Maybe we can negotiate with the bank to start the principal repayment only next year. That way, only interest would be due, and the seller’s monthly burden would not be too high either.
Of course, this means the repayment period would be somewhat longer in the end, but we would be okay with that because the house is really great.
What do you think about this, or is there another option?
Thank you very much!
As you may have seen in my other thread, my partner and I had very bad luck with the real estate agent/seller during our last attempt to buy a house.
Now we have another house in mind.
Nothing is set in stone yet; we just want to gather some information in advance.
It is important to us to have a fair and smooth process for both parties.
The situation:
The seller wants to sell his house because he is building a new one. The new build will be finished in summer 2019, so he wants to stay in the house with his family until then. However, the money from the sale is needed now (payment of the purchase price next year is therefore not an option).
There are definitely different possibilities. I am open to all ideas. Currently, I have the following concept:
We buy the house and register a right of residence for the seller until next year.
He would pay us a rent equivalent to our loan installments (interest + principal repayment).
We would prefer to avoid paying double costs from our regular rent and loan interest and/or principal repayment over so many months.
Does this approach make sense?
Maybe we can negotiate with the bank to start the principal repayment only next year. That way, only interest would be due, and the seller’s monthly burden would not be too high either.
Of course, this means the repayment period would be somewhat longer in the end, but we would be okay with that because the house is really great.
What do you think about this, or is there another option?
Thank you very much!
ypg schrieb:
Right of residence is nonsense
Tenancy agreement as well
That's how it is.
The handover date is defined in the notarized contract. Also, the transfer of the money.
This can also vary.
Either the seller arranges bridge financing for their new construction project themselves, or there is a lower sale price for earlier payment.
For win-win deals, everyone needs to sit together and calculate the benefits individually.
This is not a rare case, and those who don’t trust will remain alone.I agree with you.
The fact is, the seller needs the money for the new build at the start. That is part of the initial situation and a requirement for all interested parties. The rest is a matter of agreement. And to be prepared for these discussions, I wanted to gather some information.
Even with a lower sale price, I would still face the double burden of rent and mortgage. Additionally, there are several interested parties; we will not be the only ones with an offer. So, I can’t demand a significant reduction in the purchase price.
NeueWelt schrieb:
The fact is, the seller needs the money for the new build upfront.He wants a bit more than in a standard sale, and for that, he has to make some concessions. Otherwise, he would have to pay rent somewhere else if he needed temporary accommodation.
NeueWelt schrieb:
Even with a lower sale price, I would still be burdened with double costs from rent and mortgage.Yes, but that balances out. You do get the house at a lower price.
NeueWelt schrieb:
Also, there are several interested parties; we won’t be the only ones making an offer.That’s always the case. You should at least assume that, and it’s not up for debate: "Help, I want to buy a house, but there are other interested buyers."
NeueWelt schrieb:
I can’t demand a huge reduction in the purchase priceExactly, only in line with the rent he would need to pay elsewhere.
If he’s stubborn and claims most of the advantages for himself, then he’s not your business partner. Keep looking!
ypg schrieb:
Yes, but that balances out. You get the house cheaper. That’s true, but as far as I understand, it applies to the total duration of the loan. Unfortunately, that doesn’t help us much at first.
ypg schrieb:
Exactly, corresponding to the rent he would have to pay elsewhere.
If he is stubborn and assumes most of the benefits for himself, then it’s not your business. I agree with you on that. Sometimes the question is how much longer to keep looking. Because in the coming years, the market will continue to favor sellers.
NeueWelt schrieb:
That's true, but if I understand correctly, this applies to the total duration of the loan. Unfortunately, that doesn't help us much at first.
I agree with you there as well. Sometimes the question is just how much longer to keep looking. Because in the coming years, the market will continue to favor sellers.Why should the market favor the seller? Anyone who sells in 2 years will also pay more for a new purchase in 2 years accordingly. I have more the feeling that the end is near. Currently, unhealthy loan agreements without equity are being made.
The crash will come, and only those with healthy contracts will survive.
M
Mottenhausen24 Oct 2018 11:31tomtom79 schrieb:
The crash will come, and only those with solid contracts will survive.We are facing a different situation than during the last housing bubble in the US. As long as the shortage of housing continues (migration rate to Germany is higher than the rate of new housing construction), contracts without equity are still backed by the increasing value of the mortgaged property. As long as the economy keeps booming, there will still be buyers. The "crash" will only happen when the next recession arrives, unemployment rises, and suddenly there are no buyers for overpriced properties. But this crash will be so severe that in the end, even property owners will come out ahead, while savers will lose out.
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