Many homeowners after buying their first home aspire to sell them at appreciated prices and purchase bigger property , but the hassles of getting the deals done are many and complicated, especially if there is an outstanding loan. The process can be quite smooth if all the parties involved are aware of the ‘Vendor Takeover’.
Let us look at the parties involved in the transactions. The seller, buyer, builder,home owners lender and new buyers lender. While the buyer and the sellers intent is clear, the builder has to be paid in full. The homeowners lender has to be paid back the loan and interest accrued and the buyers lender has to ensure that their interest lies only with the new buyer. To ensure that each of the interest are met the Vendor Take over has to be strict and disciplined.
In the first step, the builder, current buyer and new buyer signs and agreement that is legally binding listing all the responsibilities with respect to each other. Once approved by all the three involved, the new lender can clear the existing dues of the previous lender to close the mortgage and disburse payments to builder based on demand letters raised and pending.
The new lender will also make payments to the old owner, based on the current equity, appreciation on the house and based on the amount agreed by the new owner. The old owner should now collect No Dues and Loan Closure documents from the lender to ensure that he is safe from liability in future.
All documents pertaining to the property should be handed over by the old owner to the new owner, who will then submit it to the new lender. The vendor takeover is now officially complete.
It is to be noted that such transactions are highly complicated in nature and not all can carry this out with precision and due diligence required. Experts at Ikia Consulting services pride themselves of completing many such high value transactions with complete accuracy and precision within stipulated timelines.