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20 June 2007

Sale and rent back agreements

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by Kay Mitchell

Sale and rent back agreements

Rising interest rates and bad debts has resulted in an increasing number of sale-and-rent back property companies pursuing homeowners who are struggling to make repayments and facing repossession.

These companies purchase homes for around 70%-80% less than the market value, paying all fees and costs, the property is then rented to the original owners at market rate. These agreements may seem appealing but they will be selling their home for much less than its worth. One advantage is that the deal is done discreetly without family or friends knowing and the can be done very quickly.

The cash can be used to pay any outstanding debts while remaining in their own home. Some of the sale-and-rent-back companies offer the chance to buy back the property at a later date at market value.

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