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!
Zaba12 schrieb:
You really caught someone clever there. It’s like your situation but reversed. Just a lease agreement and that’s it. Let them deal with the dual costs, not you. Otherwise, keep looking.No, not a lease agreement—you won’t get rid of the tenant anymore...
Secure the property transfer now and the handover later.
The implicit “rent” is included in the purchase price.
N
nordanney23 Oct 2018 14:40NeueWelt schrieb:
Sure, that way we would save on property transfer tax, but we would still have to pay rent for the apartment and the loan for 12 months. We want to avoid that. Or did I misunderstand you? You misunderstood. Either a right of residence (which is registered in the land register, no rent payments, incurs notary and land registry fees, and reduces the property’s value) or a rental agreement (then rent is paid).
I would simply sign a fixed-term rental agreement. I have even been a tenant in my own house after selling it myself ;-)
We were in a similar situation but as the sellers. I clearly stated that the apartment would only be needed starting in October, and that payment of the purchase price would only be required from then. From October onwards, if there were any delays, a customary local net rent would apply until moving out. All of this was documented with the notary.
Otherwise, you would be the one facing double payments, but apparently, such situations do occur.
For the seller, there is an interest-free period, and they should arrange any bridge financing themselves instead of passing the cost onto you.
Otherwise, you would be the one facing double payments, but apparently, such situations do occur.
For the seller, there is an interest-free period, and they should arrange any bridge financing themselves instead of passing the cost onto you.
nordanney schrieb:
Misunderstood. It’s either a right of residence (which is registered in the land registry, involves no rent payments, costs notary and land registry fees, and reduces the property value) or a rental agreement (then rent is paid).
I would simply sign a fixed-term rental agreement. I have personally been a tenant in a house I sold myself ;-) Okay, then at the beginning I think I meant a fixed-term rental agreement...
Net rent then equal to our interest plus repayment costs
NeueWelt schrieb:
We are buying the house. We will register a right of residence for the seller until next year.A right of residence doesn’t make sense.
Zaba12 schrieb:
A rental agreement is sufficient.A rental agreement as well.
Nordlys schrieb:
No. Different approach. Let’s say the price is 250,000. A 12-month right of residence is worth 14,000. So the price with the right of residence is 236,000. This reduces property transfer tax and notary fees. KarstenThat’s correct.
The handover date is defined in the notary contract, as well as when the money is transferred.
This can also vary.
Either the seller arranges bridge financing for their new construction project, or an earlier payment is reflected by a lower sale price.
For win-win deals, both parties need to sit down together and calculate the benefits individually.
This is not an uncommon case, and anyone who doesn’t trust the other party will be left on their own.