Sometimes it’s helpful to sell your home
before you really want to move. This often happens when you are having a new
home built, but aren’t sure of the completion date. Now in Kenya real estates
there is a way you can sell your home so you’re sure of the funds available for
the new purchase, but continue to live in your old home until construction of
the new one is complete. Yes, there is with the renting back strategy.
Enter the Lease-Back or Rent-Back
Agreement
The particulars of this strategy varies in
Kenya real estate sector, but in the strong seller’s market we’re experiencing,
buyers will often agree to let the seller stay in the home for a period of time
as long as rent is paid. In a competitive situation, the buyer willing to do
this will often have the winning bid even though there is another offer as high
as his.
The agreement covering the situation states
the length of time the seller will remain.
It can be done with a specific date named or wording that allows the
seller to remain up to a specific date with the possibility of her moving
sooner. The amount can be a fixed figure paid out of the proceeds of settlement
or a monthly amount, or a daily amount. It is usually, but not always, tied to
the amount of the mortgage payment under the buyer’s new loan. Sometimes there
is a deposit against damage, sometimes not.
There is usually a clause saying the seller will hold the buyer harmless
for any damage to himself or his property which occurs after the sale is
consummated and before the seller moves.
The attorney who draws up your contract
offer can create such an agreement. If you’re using online forms, you should be
able to find one for this situation. If you’re working with a real estate
broker, he or she can handle it for you.
An Example
I’ve recently seen a very pleasant example
of this idea in action. An elderly widow contracted to have a one level condo
unit built in a new community within Nairobi which provides all exterior
maintenance. She had had hip replacement surgery and wanted to get away from
the drawbacks of the home in which she’d reared her children. The home was
large, had stairs and was located on a large, partially wooded lot with many mature
perennials and shrubs. Both the home and garden were beautiful, but high
maintenance.
Her contract to purchase required a series
of deposits and a firm indication as to her source of funds well before
settlement on her new condo. The widow put her home on the market. A young
couple with two sons was very anxious to buy it. The situation was competitive.
They made the widow an offer. She countered their original offer. She did not
raise their offer price, which was slightly below her asking price. She did not believe the young couple would
qualify for a larger loan. Instead, she did something rather creative.
The widow countered with a proposal that
she “rent back” for a period of “up to” a certain date (a date beyond her
scheduled competition date on the condo) in exchange for a modest flat sum to
be paid to the buyer at settlement. The total rent back period was less than
two months. The flat fee was less than the amount of the new mortgage payment
for the buyers. However, since they made no payment on their new mortgage the
first month, it wasn’t too far out of line. The couple really wanted the home,
so they accepted the counter offer.
Another win, win situation was created. The
widow only had to move one time and the young couple got a house they probably
wouldn’t have in a straight bidding war. If you find yourself in a situation
similar to either the widow or the young couple, perhaps you can work out a
similar solution.
For more information about Kenya real
estates please visit www.kenyan-real-estate.com
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