Jump to content
House Price Crash Forum
mentletv

Dubious Way To Quickly Sell Your House?

Recommended Posts

I’m not sure what I think of this scheme. I wonder if other people are familiar with it. This company (http://www.8515.co.uk) guarantees to buy your property for the true market value (as assessed by a surveyor).

They give you 85% of the sale price straight away, and the remaining 15% within five years. They expect to make a profit by cashing in on the rise in prices over the coming years. They make this guarantee even if property prices fall (are these people crazy?).

Perhaps this is an option if you want to sell you house quickly before property prices drop! The stated benefit is if you need a quick sale because of a cash flow crisis, downsizing, job move.

Is this a new scheme or a scam? Does anyone have any experience?

Share this post


Link to post
Share on other sites
How we work

This unique scheme is different from others you may have heard of. Unlike schemes offered by other companies, this scheme will pay 100% of the real value of your home. Others will give you an offer that is less than the value of your home. Their aim is to resell your house at a higher price in order to make a profit.

This scheme works by agreeing the market value of your property today, and then releasing 85% of that value by arranging a re-mortgage in your name. At some point over the next 5 years the value of your property will have risen. It is at this point that the house is sold and you are paid the final 15% of the agreed price. Solutions profits from the rise in the property value from the point of agreement until the point of sale.

When the agreement is signed and the capital released from the property the house remains yours. However at this point you must move out. Solutions will arrange for your property to be rented until it decides that the time is right to sell it. The final 15% payment is made to you and the house is sold.

The steps that you will go through for this scheme are:

1) Initial assessment

We talk through the scheme with you and decide if you qualify. Our financial experts will determine if the refinancing of the house will work in your situation. We also check possible rental and investment value of your property. A survey of your house is arranged to determine its real value. You will need to fund this survey. At this point you are under no obligation and may decide not to continue.

2) The agreement

Using the surveyor’s report we agree the value for your home with you and complete the re-mortgage application.

3) Initial payment

At this point you move out of the property. A lump sum amounting to 85% of your property value is paid into your account.

4) Rental period

This period will be no longer than 5 years, possibly much shorter. Solutions rents your property out and ensures that your re-mortgage payments are met. It is important to remember that during this time the property is still yours. There are no costs or liabilities for you during this period. We will take care of our investment (your property) and ensure that tenants are found and the property maintained. As per the agreement, you have no rights or claim on the property at this time. If however we miss to monthly payments you can cancel the agreement and reclaim the rights to your property.

5) Final payment

Over the next five years we expect your property to gain in value. When Solutions judges that it is time to sell then the property will be marketed and sold on your behalf. You will be paid the final 15% of the original agreed price. Solutions retains any profit made from the sale.

At all points we aim to be transparent in our transactions and workings, making sure that your receive the true value of your property and give you visibility of all costs and processes.

I wonder how the "true market value" is arrived at: after all, if they are the only ones who will buy your property, then it's true market value is, after all, whatever they are prepared to offer. Clearly thats going to be less than your asking price, because if your asking price was true market value then it would have sold.

It if all goes tits up, it looks like eventually you might get the title to your home back, after it has been let to various tenants for several years.

They seem unequivocally sure that your home will rise in value in the next five years. Even if it rose, say, 8% over the next five years from a so-called "BMV estimate" they bought if from you for, I wonder how much of that would be undone by having to fix the stuff the tenants broke or wore out.

It looks like the service they are actually offering is that of a kind of lettings agent, with a guarantee on the value of the property. Of course, if the market goes tits up, so will they, so they won't be around to pay you back your shortfall.

Share this post


Link to post
Share on other sites

I wonder how the "true market value" is arrived at: after all, if they are the only ones who will buy your property, then it's true market value is, after all, whatever they are prepared to offer. Clearly thats going to be less than your asking price, because if your asking price was true market value then it would have sold.

It if all goes tits up, it looks like eventually you might get the title to your home back, after it has been let to various tenants for several years.

They seem unequivocally sure that your home will rise in value in the next five years. Even if it rose, say, 8% over the next five years from a so-called "BMV estimate" they bought if from you for, I wonder how much of that would be undone by having to fix the stuff the tenants broke or wore out.

It looks like the service they are actually offering is that of a kind of lettings agent, with a guarantee on the value of the property. Of course, if the market goes tits up, so will they, so they won't be around to pay you back your shortfall.

In the words of Arthur Daley--------walk away my son!

Share this post


Link to post
Share on other sites

Sounds complex and very dodgy to me.

You'd have to be desperate or stupid to consider this.

Just the fact that they think property will rise in the next 5 years is good engouh reason to doubt their credibility.

And all the while they rent your property out you are holding the mortgage?? Crazy.

if you believe their spiel you might as well just rent the property out yourself and wait for HPI of the next 5 years to reward you when you sell.

Edited by non-FTBer

Share this post


Link to post
Share on other sites

ICBA to read this very carefully but a quick scan makes me wonder if it's some kind of remortgage / turn you house into a BTL scam. ie. They raise a mortgae on it in your name (prob IO) and then rent it out to make the payments. Bet you end up as being liable for it after they've done a bunk.

It's sure to be a scam of some kind anyhow.

Share this post


Link to post
Share on other sites

ICBA to read this very carefully but a quick scan makes me wonder if it's some kind of remortgage / turn you house into a BTL scam. ie. They raise a mortgae on it in your name (prob IO) and then rent it out to make the payments. Bet you end up as being liable for it after they've done a bunk.

It's sure to be a scam of some kind anyhow.

Yeah. I expect that they charge you high fees for managing the property (getting tenants in etc) and leave you holding an IO mortgage against an asset that has fallen in value while they are busy winding up the limited company and booking flights to the Bahamas. :lol:

Share this post


Link to post
Share on other sites

Thanks for your thoughts. Not something I would consider. I think you'd have to be pretty desparate for a quick sale and a lump of cash before you'd go this way.

I see this as another investor looking for a way to make money from others. It may work for some people, but I can't help but feel it is rather cynical.

Share this post


Link to post
Share on other sites

All the risk is to the homeowner. If it goes tits up, you lose. If property increases, you still lose and they win.

Share this post


Link to post
Share on other sites

If it looks like sh*t and it smells like sh*t then it probably is SH*T!

The fact that they are using a web template (see bottom right) would indicate this is NO PROFESSIONAL OUTFIT!

Some snippets i love.......

"You will receive a fist payment of 85%...."
- I know this is a typo but it reads like they come to your house and knock the sh*t out of you until you agree to sell at 85% market value! :)
This scheme works by agreeing the market value of your property today, and then releasing 85% of that value by arranging a re-mortgage in your name.

Can someone get a mortgage in someone elses name???? Sounds a bit strange to me!!! They probably offer you 85% of the capital at 10% APR or something!

At some point over the next 5 years the value of your property will have risen.

Oh the "property ONLY rises arguement......" think this has had enough column inches tbh! Tut... Tut... SHEEPLE!!!

When the agreement is signed and the capital released from the property the house remains yours. However at this point you must move out. Solutions will arrange for your property to be rented until it decides that the time is right to sell it. The final 15% payment is made to you and the house is sold.

So they buy your house... They chuck you out and rent it out... then WHEN THEY DECIDE - could be in the next cycle (10-15 years)? the time is right to sell you get the other 15%.

So they make money out of you by:

Giving you a mortgage supplied by them, at their rates.

They sell when they think there is enough profit, all the time holding onto your 15% which generates them interest.

They then give you the 15% (allegedly) at some point in the future. But only 15% of what it was decided at the time of the agreement. If the market goes TITS UP then your onto a winner!

A survey of your house is arranged to determine its real value. You will need to fund this survey. At this point you are under no obligation and may decide not to continue.

Hmmm... let me guess.... they appoint the surveyor????

Q: What if property prices fall over the next 5 years?

A: The price that we agreed to pay to you when you entered the contract is guaranteed. By selecting properties carefully and receiving a good rental income the investor can still make a profit from your property.

It states quite clearly "Solutions rents your property out and ensures that your re-mortgage payments are met". So it looks like they sell you the mortgage. They cover their ass by getting someone to rent it. and Take rental profit.

The sums may be something like this.

Buy a crap house £50K

Then give the owners a mortgage of 85% value £42,500. And charge them 10% APR. Repayments let say of £220 a month. (Making money)

Get rent on the property of £500 a month (£280 pcm profit)

In the even of any downturn the chances of a property at this end of the market suferring A LOT is quite slim.

I can see how this is gonna work on a £200,000+ house as the mortgage could not be paid by the rental income i.m.h.o. I suppose if they got enough income from rent to cover the mortgage payments (that they are making a profit from) they would be content with the interest onn that mortgage payment.

The thing I dont understand though. If they re-mortgage the house in your name and you take the cash to move on. Surely you cannot get another mortgage to go up the chain. Looks like this scheme is aimed at DOWNGRADERS.

I suppose it not a SCAM but they wil make a lot of money from it. I would think that they chose their properties very carefully and they are UNLIKELY to make a loss. 1 home might lose them £20K but another might gain them £120K. The key here is the mortgage and the APR. Also they make money from surveyors.

If it suits people then fine. Let other people make money from your property as they are taking on SOME RISK. Not for me though.

TB

Share this post


Link to post
Share on other sites

they are getting a BTL investment by

1) lending you money at their rate.

2) Getting you to take all of the risks.

10% a year (if it is that) is 50% in five, even if the prices drop.. look how far they would have to drop for them not to be quids in..

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.