Equijudge for estate agents
We provide a financial service allowing home buyers to move in straight away rather than waiting a month or two for paper work.
How it works for the buyer, seller and agent:
Buyer:
They see a place they like on which the service is available. It should be listed on our website with a purchase price, rental rate and days to completion and required deposit. There will also be details of the property such as the lease length, service charge amount and significant problems with the property. Also what the plan is with furniture.
They can contact us or use the site to suggest changes – lower price, longer completion or whatever.
Once agreed they wire the depost, about 10% of the price to our lawyers to be held in escrow. Also the seller has to sign an agreement to sell at the given day and price if they complete.
They can then have keys to the appartment and move in. If they change their mind they can move out and just pay rent for the time they are there. If they complete by the given date they buy the place.
Equijudge can take money from the deposit for damage or overstays. We can also refund some of the rent if the property is misrepresented materially.
Seller
They list the appartment for sale on the system. The benefits are potentially a quicker sale or better price. Also they get rent if someone trys it a bit and then drops out whereas in the usual system if a buyer makes an offer and drops out they don’t.
On the downside they are comitting to sell at a given price at a given date and so may miss out if they could have got a higer offer in that time. There is some option value in favor of the buyer.
Agent
The service is another tool they can use to get sales. They can say to a prespective buyer, look with this place you can move in now and try it for a couple of days or stay indefinately. It may give them a competetive advantage if they offer the service and the agent down the road does not. We can also provide some comission out of the rent (20% maybe) so they get some money in straight off.
The agent can come up with suggested terms for the deal in terms of rental rate, selling price and days to completion and let us know or enter it on the website and then the proposed deal can be sent to buyer and seller to agree.
Charges
We plan to basically charge about 0.8% of the purchase price on completion. There will also be a £99 deduction from rent for admin.
Potential Issues
Buyer stays on and doesn’t pay
This is one of the main reasons why this sort of deal does not happen at the moment. To avoid this if they stay beyond the agreed period and do not move out we will go to court to get them out with the legal fees and ongoing rent coming from the depost they have in escrow. This as well as hopefull get rid of bad tennants within a year or so should also put off scammers as if they are going to do that kind of thing it would be far cheaper to do it on a normal rental where they don’t have a 10% deposit paying the fees against them.
Sellers solicitors freaking out
Normally solicitors are wary of the above issue. They can talk to our solicitors who would be holding the deposit and doing the legal action and hopefully be reasured.
Seller ignores the contract and takes a higer offer or won’t sell
There would be a penalty clause for say 5% of the value or the difference in offers plus legal fees and we would take court actions against them and pass on any recovered money after legal fees to the would be buyer
Landlord insurance, mortgage conditions
The seller would be responsible for things being in order.
Right to rent immigration checks
I don’t think they’s apply as it would only be a short term holiday style rental.
Searches and the like
It would be helpful if the seller has these in advance so the buyer can check there are not problems but not essential.
Furniture
I’m kind of assuming the property will be somewhat furnished so the buyers can move in straight off. If there are complications like the place being unfurnished or the buyer wanting to keep their furniture and the seller moving theirs in that would be arranged on a case by case basis
Property damage
If the seller claims the property is damged by the renter we can have a look and deduct something from the rent.
Convanyencing Solicitors
The buyers and sellers can use who they want but it might be helpful to have some recommended ones who we work with and who are familiar with the system.