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Partial sale of property in old age: pitfalls and alternatives - financial expert gives tips
Owners who need financial support in old age but want to remain living in their property are increasingly becoming aware of the partial sale of their property. A share of the property is sold to a corporation, while the owner remains the sole user and pays a monthly usage fee. However, the consumer advice center warns of the pitfalls of this model. In addition to the costs of the usage fee and the property tax, the seller also has to pay for the necessary maintenance. If the owner later decides to sell the house entirely, a certain percentage of the purchase price goes to the provider as an implementation fee. In addition, many contracts guarantee an increase in value...
Partial sale of property in old age: pitfalls and alternatives - financial expert gives tips
Owners who need financial support in old age but want to remain living in their property are increasingly becoming aware of the partial sale of their property. A share of the property is sold to a corporation, while the owner remains the sole user and pays a monthly usage fee. However, the consumer advice center warns of the pitfalls of this model. In addition to the costs of the usage fee and the property tax, the seller also has to pay for the necessary maintenance. If the owner later decides to sell the house entirely, a certain percentage of the purchase price goes to the provider as an implementation fee. In addition, many contracts guarantee an increase in the value of the property, which the seller must pay out of his own pocket if it does not occur. However, there are better alternatives such as normal bank loans or partial loans, which, according to the consumer advice center, should be examined.
This information was summarized according to a report from www.ndr.de.
Impact on the market or consumer:
– The partial sale of a property can entail high follow-up costs for owners, especially in relation to the monthly usage fee, property tax and the necessary maintenance.
– Contracts for partial sales often contain clauses that guarantee the seller an increase in the value of the property. If this increase in value does not occur, the seller must pay the difference out of his own pocket.
– Consumers should consider alternative financing options such as traditional bank loans or part loans and have the contract details carefully examined before deciding on a part sale.
– With short-term usage fee agreements linked to the consumer price index, there is a risk that the usage fee will rise quickly.
– Property owners should agree on long-term conditions for the usage fee to ensure planning security.
The impact of this information on the market could be that more owners consider alternative financing options and fewer people choose to partially sell their property as a solution to financial problems.
Source: According to a report from www.ndr.de
Read the source article at www.ndr.de