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No Mortgage Needed - Seller's Finance

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Here's an interesting way of off-loading a house: buy it from the seller in instalments

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I walked past the house recently. There's a note in the window explaining how many £s a month you pay the owner to buy their house. The note in itself hasn't drummed up the necessary interest, so now it's on Rightmove.

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Here's an interesting way of off-loading a house: buy it from the seller in instalments

RM link

I walked past the house recently. There's a note in the window explaining how many £s a month you pay the owner to buy their house. The note in itself hasn't drummed up the necessary interest, so now it's on Rightmove.

what are the details of the contarct?

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Here's an interesting way of off-loading a house: buy it from the seller in instalments

RM link

I walked past the house recently. There's a note in the window explaining how many £s a month you pay the owner to buy their house. The note in itself hasn't drummed up the necessary interest, so now it's on Rightmove.

When people cannot sell things, they often resort to vendor financing. That is what this sounds like.

In general, vendor financing ends up in tears for the vendor.

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We had some kind of vendor financing system in France in the past (still exists but quite unusual), called Viager.

If it was a viager libre (free viager) most of the time you were giving a small lump sum to the vendor and you had to pay an agreed monthly amount until the rest of their life.

Most of the time the vendor where rather old people who were using this system as a pension. You were obviously free to do what you want with the property, live in it or rent it out.

Very fortunate were the people who were buying a property with this system and the vendors passed a few months later, you where then owner of the property in full. Unfortunatly many cases of people who bought such property from vendors in the seventies who ended living over 100 year old, and as a consequence over paid their property.

It seems different in the case in question, as it does not seem to be linked to the life time of the vendor.

Edited by Mayalabeille

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This seems to have been quite common in the UK 100+ years ago.

The deeds of my parents' house show one owner in about 1850 selling up and allowing the new owner to pay them back in instalments over a number of years.

Similarly my old house (built around 1900) deeds showed the original builder gave a mortgage to the first occupier. The repayment amounts were handwritten on the deeds with intials and dates next to them. The repayments suddenly stopped in 1915, then in 1919 the whole lot was cleared with about three large lump sums. A few months later the owner sold up and moved to a posher area......Apparently those few who came back from the war unscathed could practically have their choice of job, house and woman as men of working age were in such short supply!

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When people cannot sell things, they often resort to vendor financing. That is what this sounds like.

In general, vendor financing ends up in tears for the vendor.

As long as he has first charge on the property he can't lose any more than the fall in the value of the property, which is much the same amount that is at risk if he doesn't sell at all.

So what's the problem?

tim

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  • 276 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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