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The Leaseback—Continue to Use the Asset Sold Is Possible Part 1

Recently, we have received many requests regarding selling the self-owned real estate in exchange for cash in order to go through financially hard times. It is not easy to let go of your house where you are used to everything about it.

In this article, we will introduce you the “Leaseback” as a way to prepare the savings for life or even life when you are old while still having the possibility to live in the house that you have sold.

We will further explain this program which is popular among the seniors as they usually would not like neighbors to know that they have sold the house.

The below for your kind reference, especially if you are considering selling your house.

  1. About the Leaseback

(1)Advantages

  • Still able to use the house after selling
  • Allow to buy the house again once sold
  • The payment received can be used for other investment
  • No need to have neighbors aware of the status
  • No need to pay fix asset tax, management fee and repairing fee
  • Can be used for dementia patients

(2)Disadvantages

  • The selling price is lower than the market price
  • The rental tends to be high based on the selling price
  • It costs more for buying back than selling out

  1. The Procedure of Selling and Buying

  1. Summery

  1. About the leaseback

The leaseback program is for the previous owner of the house who wants to establish the contact with the new owner once it is sold so as to be still able to use the house.

As a result, the person is provided a way to manage the cash flow while still being able to use the house even if it is sold.

(1)Advantages

  •         Still be able to use the house after selling

To make it possible, while signing the sales contract, a fix-term lease agreement is needed, once it signed, the previous owner will receive permission from the new owner to still be able to use the house.

  •         Allow to buy the house again once sold

Upon agreement with the new owner, the previous owner can buy the house back once certain conditions are met, such as compromise of price.

  •         The payment received can be used for other investment

There is no constrain for the payment received from selling the house, therefore, according to your own will, the money can be used for the senior life or for develop your own business.

  •         No need to have neighbors aware of the status

The transfer of the ownership happens as soon as the sales contact is signed, so it is possible to prevent the neighbors being aware of the status.

  •         No need to pay fix asset tax, management fee and repairment fee

Since the seller has no longer the ownership of the house, he/she doesn’t need to pay the fixed asset fee any more. However, the fixed asset tax is calculated by the days of owning before the sale, which still needs to be cleared by the seller.

Though the repairment fee is shouldered by the new owner only, necessary refurbishment is still charged to the previous owner.

  •         Can be used for dementia patients

In the case that if the seller has dementia and cannot express his wills adequately and clearly, he/she is not allowed to sign the contract. Instead, the adult guardianship system is introduced. It is required to confirm the guardianship by the family court.

In this case, the offer of selling price is not decided by the seller or his family, whether the house can be sold, and at what price it can be sold, such decisions are made by the guardian who is confirmed and assigned by the court.

Therefore, once the house is sold in case of emergency, the seller may not be able to use the money for senior life or for senior home expense, or even if the money can be used for such purposes, it may take more than 1 year to receive the money.

That’s why utilizing the leaseback program is recommended for dementia patients, it is regarded as an effective method when selling the house.

The rest will be introduced in following article, please stay tuned. Should you have any inquiries regarding today’s sharing, please feel free to let us know.

Toll Free: 0120-138-552  

For Chinese:090-8456-6196  

For English:080-9346-2991 

For Korean:090-8448-2133

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