Renting With An Option to Buy
Suddenly there seem to be a lot more visits from people wanting to buy a house for sale in Spain. There are also more people looking for straight rentals as well as option contracts for later dates when the banks are more open to lending after they see a better market and are able to get capital to fund buyers.
This week in Valencia one of the jobs has been phoning sellers to ask if they would consider renting with an option to buy further down the line and the response has been surprising. More than half those questioned were interested after hearing what was involved. So if you are in a position of having a property that you could rent out before selling here is how it is done.
The basic premise is that somebody is interested in your property but cannot purchase currently for one of many reasons, ie Waiting for sale on their property, waiting for banks to start lending, needs greater time before proving income to the banks or going through the process of getting residency in Spain to get a better mortgage deal. Renting with a purchase option could be a solution if this is your particular case.
The contract that is drawn up can have many variables but the base of it is that they pay an agreed rental for an agreed time and within that period of time they have an option to buy the property and the right to equal any offer that comes in on the property. Sometimes there is a guarantee on behalf of the owner to stop marketing the property for a set time so the person renting can settle, in one of our contracts they were guaranteed eight months in the property without any change of ownership. The tenant thus has a stake in the property.
The good point for a potential purchaser is that an agreed price is set now and they can buy at that price at any moment. If prices drop then they can renegotiate the price in the future if they wish. Positives include the fact that if prices go up then the tenant has a guarantee of purchase at a stated price. The owner gets a price guaranteed during the contract and has the obligation to sell at that price if the tenant wishes to purchase. They also have a guaranteed rental and a person living in the property who is more likely to look after it as they have a stake in the future of that property.
Drawing up the contract is a bit more complicated as it requires a greater level of negotiation and more detail but luckily we take care of that negotiation for you.
