Real estate agents can find themselves in a difficult situation in certain cases such as over-indebtedness. To get out of this situation, the only solution available to the owner is the repurchase sale. In this kind of situation, a private investor acquires his property. Thus, the funds collected will be used to pay the debts and the rest will be kept by a notary. It is a practical solution in case of unpaid credit and to avoid having your house mortgaged at auction.
What is a repurchase sale?
A repurchase or repurchase sale is a long-standing insured sale method. Indeed, although it is not yet widely known at present, and it is a great pity, it has been practiced since the Middle Ages. It is presented as a debt restructuring solution for over-indebted sellers most of the time. The operation of this type of sale is simple: it refers to a sale treaty in which the seller moves the ownership of his house to a buyer, while retaining the right to be able to take it back. To do this, he must return the sale price and compensate certain costs: the fair costs of the sale, the essential repairs carried out by the buyer, or other expense which has made it possible to optimize the value of the property.
With a repurchase, the sale contract consists of a buyout option. To be able to recover his property, the former owner must meet his conditions in addition to making the acquisition within 5 years at the latest. Otherwise, this person’s redemption option lapses. This kind of sale is therefore analyzed as a sale with a resolutive condition. Because, if the seller manages to exercise his repurchase faculty within the determined period, the sale will be canceled retroactively. As a result, the shares are returned to the state before the sale.
What are the advantages of a repurchase sale for a seller?
A repurchase sale offers many advantages, particularly to people facing financial distress such as those who no longer have the right to a bank loan. This is also the case for those who are in a situation of bank over-indebtedness. In this case, these people reduce the debt on the sale of repurchase property. A natural or legal person may therefore have recourse to the repurchase, whether it is a business, an individual, a craftsman, a liberal professional, a trader or other. In fact, with the repurchase, the seller will find a source of financing without having to go through the credit institutions where it is certainly listed. In addition, this type of sale keeps the goods sold.
In fact, the seller can enjoy the joy of being able to stay on the premises by signing a random occupancy agreement with the person who purchased the premises. To do this, he must pay an occupancy allowance every month. Finally, within 5 years, the seller can recover the property at the appropriate time by exercising his repurchase faculty and by buying the house. However, be aware that the time limit has passed, he will no longer be able to use his redemption option and will lose the property.