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Wankan

Strange Vendor Selling Terms

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http://www.rightmove.co.uk/viewdetails-101...pa_n=1&tr_t=buy

The terms in the brochure :

"The vendor will dispose of the freehold interest with vacant possession but subject to the vendor having an option (not exercisable for the initial three years), to repurchase the property on not less than six months' notice at twice of whatever is the then open market value of the freehold interest (to include the value of any subsequent improvement works). For your information the vendor owns the adjacent land lying to the south and east and will require sight line covenants across the front garden to enable construction of a proper access road to serve that land should it be required. Further background and other information is available from the agents on request."

Anyone else ever seen this before ?

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Does that mean they can buy back at the bottom of the cycle and sell again when it rises??

Double the market price, even when it comes off won't be cheap enough to try that.

Is there a pending rezoning or similar?

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Guest consa

I think it means they can sell it to raise the cash to build next door, build the next door one over the next 3 years by which time they should have both more than doubled in price hence they can sell the new build and buy back the original house at BMV hence making a killing, the potential purchaser for this deal stands to lose out on HPI.

What the purchaser should place in the clause is something on the lines of they should give him double the amount of any losses on the property in 3 years time :huh:

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buy back the original house at BMV hence making a killing

to repurchase the property on not less than six months' notice at twice of whatever is the then open market value of the freehold interest (to include the value of any subsequent improvement works).

Why would they want an agreement to buy back at twice the value ??

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to repurchase the property on not less than six months' notice at twice of whatever is the then open market value of the freehold interest (to include the value of any subsequent improvement works).

Why would they want an agreement to buy back at twice the value ??

This is dodgy. Who determines the valuation and at what point? That would be critical. If they know they can get permission for a development it might well be worth their while to buy back prior to the development permission being granted.

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The only thing that makes sense to me is that they need to sell to raise the money to go through a long winded and expensive planning process on adjacent land. If they get p/p then they'll need the house as part of the site or for access, but by that point the value of the whole site will be so much higher as a building plot that buying back part of it at twice market value will make sense.

If they don't get p/p then they won't want the house anyway.

If that is the answer (and it's only a guess) then surely a remortgage would be better.

Very odd.

FFF

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One has to assume that Vendor thinks that the land might more value as part of a building plot than 2x the MV as a house.

So in that case when/if the land is revalued for the buy back does the valuation take into account its importance as an access to a potentially lucrative development??

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So in that case when/if the land is revalued for the buy back does the valuation take into account its importance as an access to a potentially lucrative development??

I would assume not, as that would defeat the point of the clause (if I have analysed the vendor's intention correctly).

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  • 302 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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