Would there be room on the market for a seller, selling at a much reduced price, but with a sell on clause of sorts? Like with say an Irish footballer getting signed by a middle tier club in England. The player is unproven at that level of football so he is priced accordingly but Irish club insert clause in contract that states they are entitled to x% on all future transfers of the player.
So say a suburb of Dublin, house is priced at €400,000. Seller has had zero viewings. Young couple working in area looking to put roots down have their interest sparked but bank (thankfully) will not offer them 100% mortgage. Between savings of €50,000 and banks realistic (ish) approval for mortgage of €200,000, they could pay €250,000 for the above house. Would a seller, with the agreement of the buyer, agree a clause of sorts in the event that house prices recover and spiral out of control or that the house is sold for a greater amount in the short term?
Not entirely unprecedented, many builders have been using clauses preventing people from assigning (flipping) their contracts before completion. The question is - why on earth would any purchaser agree to it?
Say I saw a house asking €400k and I thought it worth €200k, made an offer and the seller made the propsal in the OP.
That would mean the want to buy an option on my house. I would look at that and price it, and it might be worth €50k if for a long term, so that would need to be deducted from my offer. So now the seller would have to be willing to take €150k.
But this arrangment would be messy and require Moe legal expense and create issues of incumberance, so I would suggest we just pay out the fair value of this option in cash, wish is to add the €50k back on to the price, which takes us back to my original offer of €200k.
Original thinking, but in the end this has a price and seller should roll it into their price.
Nothing new in this in principle. It’s common for development land to be sold on with an overage clause. If the end development produces a higher value then a portion of it kicks back to the original seller.
All I think that would be required in a single house sale would be a 2nd charge behind the bank’s.
Could be worth a try though by sellers and purchasers. However, the price should be below market, because market value should include expectations of future increases which under this model would be shared.
