First Time developer and seller advice needed

[erwq123]

Hi i have been lurking and reading this forum for quite a while and have picked up some usefull pointers and tips but now i have a question of my own and being a first time poster please bare with me thanks.

I have just built a large house which has been placed on the market for the past 2 months. We have had interest from some buyers but one buyer in particular seems very keen. However there is a slight problem he is currently awaiting to sell 2 of his own properties. Due to this he has offered to rent the house on a 1 year contract with 3 months rent up front. However this is all subject to him receiving approval from the council to build an extention. Assuming that he does get permission he has told us that he will build the extension with his own builder while accepting to sign a contract to buy the house when he can for a fee which we have agreed upon at the moment. This offer does seem too good to be true from one side but from another angle seems reasenable as he wants to guarentee the property is not sold to anyone else.

Would anyone see any problems with this situation? A possible scam involved anywhere? The only thing i could think of was that he could get a shoddy extension done to purposefully reduce the price of the property dramatically so as to finish his lease term and then offer a much lower value than which was agreed. Any advice/input is welcome thanks.

[qetta]

Originally Posted by erwq123

Hi i have been lurking and reading this forum for quite a while and have picked up some usefull pointers and tips but now i have a question of my own and being a first time poster please bare with me thanks.

I have just built a large house which has been placed on the market for the past 2 months. We have had interest from some buyers but one buyer in particular seems very keen. However there is a slight problem he is currently awaiting to sell 2 of his own properties. Due to this he has offered to rent the house on a 1 year contract with 3 months rent up front. However this is all subject to him receiving approval from the council to build an extention. Assuming that he does get permission he has told us that he will build the extension with his own builder while accepting to sign a contract to buy the house when he can for a fee which we have agreed upon at the moment. This offer does seem too good to be true from one side but from another angle seems reasenable as he wants to guarentee the property is not sold to anyone else.

Would anyone see any problems with this situation? A possible scam involved anywhere? The only thing i could think of was that he could get a shoddy extension done to purposefully reduce the price of the property dramatically so as to finish his lease term and then offer a much lower value than which was agreed. Any advice/input is welcome thanks.

I am no expert of course but I think you should be VERY cautious indeed about accepting this person's offer. See a solicitor before entering into any agreement. No way should you allow him to build the extension until the house is legally his, in my opinion, I think this is asking for trouble.

[Adam Long]

In todays housing market you need to be more open to unusual methods of buying and selling property but always involve a good solicitor to check all paperwork and in this instance ensure that:

1) He is tied in to paying the 12 months rent no matter what and that the monies are secured against one of his properties in case he pulls out
2) You have to approve any plans before he builds so that you can get a surveyor to check them.
3) You get him to guarantee the completion of the extension to a standard you want in case the property comes back to you either with the extension part completed or finished and again the costs to make good (if needs be) are secured against one of his properties in case he pulls out
4) He has to buy the property in the 12 months and does not put in the contract that this is conditional upon him finding a buyer to sell the expanded house on to and that the sale agreement is not a "lease option"

You will also need to get consent to let from your mortgage lender which may significantly raise your monthly payments

If he agrees to this then I would say that your back is covered and someone else has the worry of paying the mortgage for a year

[CreativeCASHbuyer]

First of relax! things that seem to good to be true are always possible and are not directly scams.

Adam said some good things here.
Legally you want to make sure you both are well protected. Basically what your buyer want to do is called a purchase Option (it is how Donald Trump does most of his deals) a good solicitor for this would be MS-Law 01617724500. A thing with Options is that your buyer would have the option to buy but not the obligation (understandable since he/she wants to make sure you can not sell to anyone else while he put in sweat and money in the extension. As long as the buyer does good work (a crucial bit here) he/she will kind of guarantee he really wants to buy the house. otherwise after the contract period you will get the house back plus an extension
No one will plan on doing this to do harm but you need to be sure what the builders expertise is.

Good luck with it!

Jack