Did you know that it is possible to buy back a property that has just been sold? Indeed, thanks to the sale with right of repurchase, also known as « sale with the option of repurchase », any owner can take back the property sold after a certain period of time.
It is important to know that this legal mechanism is not new. It was already practiced since the Middle Ages to facilitate the financing of real estate values. Nowadays, it is more and more used in the real estate field. If it is so popular, it is because it has enormous advantages.
The best way to avoid over-indebtedness
The sale with right of repurchase is not for everyone. Indeed, it is reserved for the owner who is facing enormous financial difficulty. So to solve this problem, he can very well sell his property to an investor in exchange for cash. These funds will enable him to pay his creditors. As a result, this avoids over-indebtedness, i.e. the owner’s inability to pay off his debts.
This mechanism is a solution to some of the problems associated with over-indebtedness. It prevents, for example, seizure of property, formal notice, debt collection and banking prohibition. Above all, it avoids the auctioning of the property, which is a rather painful procedure for the owner.
Moreover, the sale with right of repurchase can be carried out on all types of real estate, such as a single-family house, apartment, bare land, business premises, etc.
A discreet operation
The sale with a repurchase agreement is different from the classic sale. Unlike the latter, it allows the seller to continue to enjoy his property, even if he no longer enjoys the status of owner. He is therefore not obliged to move or move somewhere. This is interesting, insofar as he remains the occupant of the property in the eyes of third parties.
Rest assured, even if it is a discreet operation, the sale with a repurchase agreement is very secure. Indeed, it must respect the conditions and formalities imposed by law. First, the contract between the owner and the investor must be concluded before a notary. If this is not the case, then it is null and void. In addition, the terms remain the same, since the law grants the seller a period of five years during which he can enjoy his property.
Continuous enjoyment of the property
It should be remembered that a sale with a repurchase agreement allows the seller to occupy his property. Here, the occupation is not free. Indeed, it is granted in return for an indemnity allocated to the investor, i.e. the buyer of the property. Although it is based on the same principle as a rental or lease, it is different because it is a compensation and not a rent.
Thanks to the sale with right of repurchase, the seller can keep his right to enjoy his property. This means that he can always improve the appearance of his property by undertaking improvements, etc. It is also possible for him to continue to use the property for professional purposes, especially if it is commercial premises. However, this right of use remains limited. At the end of five years, the seller may no longer avail himself of this right, especially if he is unable to buy it back.
However, if one cannot wait five years, then one can opt for real estate portage. Unlike a sale with a repurchase option, this does not impose a time limit for the repurchase of the property. It can be done at any time, as long as you have the necessary funds. In addition, the carry transaction is different from a sale. In reality, it is a temporary transfer of ownership to an investor.
The possibility to buy back his property
If the sale with right of repurchase is of increasing interest to individuals, it is because it offers them the possibility of redemption. Indeed, they can reacquire their property after a period of five years. They can thus become « owners » again after having occupied their own home for some time.
This buy-back option is possible thanks to the five-year period granted to the seller. In general, this time is granted to the seller so that he can regain his financial equilibrium and face his financial difficulties. At the end of this period, if he no longer has financial worries, he can very well apply for a bank loan to buy his property.