FAQs
How is the purchase offer calculated?
In order to purchase your property, The Home Alliance usually obtains a buy-to-let mortgage. Unlike a standard mortgage, there are many contributing factors that affect the value of a buy-to-let mortgage - the main contributing factor being the property's true rental value
The rental market value of your property is mainly due to the area in which the property is situated. For example, a £200,000 2 bedroom flat in London can charge significantly more rent than a £500,000 four bedroom detached house in the Cotswolds.
As mentioned before, this is due to the rental value of the property and its ability to cover the mortgage interest secured on it. Therefore, a property's rental value is the main reason why some offers are higher than expected and some are lower.
The Home Alliance will also accrue many costs in the process of the sale and after it has been sold, such as legal fees, management and maintenance costs of the property, insurance etc. It is also worth remembering that the company will be taking a significant risk when purchasing a property in the present climate, especially when you consider that house prices have had huge growth over the past years and are expected to decline. In the last 4 months, house prices have fallen by approximately 5 percent, with most analysts predicting anything from a zero to a huge 35 percent negative crash over the next few years. More information can be found at www.housepricecrash.co.uk
The Home Alliance will have to factor in all the costs below when they calculate the final purchase offer on your home.
Legal fees
Stamp duty
Market decline
Property management (service/repairs)
HIPS
Operation costs
Valuation fees
How much rent will I have to pay and will it change?
The monthly rental charge is initially based on the market rental value of the property and then decreased as much as possible in light of the mortgage repayments that the Home Alliance will have to pay. Therefore, we never charge any higher than market rent and in the majority of cases, charge much lower. The monthly rent will be fixed for at least 12 months and then the only changes that will occur will be in line with interest rates and inflation. Therefore, the rent can fluctuate up and down depending on the economy.
Is my tenancy secure?
Yes, The Home Alliance uses a buy-to-let model which is based on a long-term tenant paying rent for many years. The Home Alliance does not want an empty property and will allow you to stay in your home for as long as you wish.
The Home Alliance understands the present financial climate and works hard to reach an agreement with any tenants struggling to pay their rent.
The Home Alliance has never lost/evicted a tenant and continues this perfect record in to 2008.
Do I have to pay anything?
There is no end cost to you, the seller, as The Home Alliance will pay all your selling and legal costs on completion. You will be asked to make an initial commitment payment to cover the cost of the property valuation however, this will be refunded back to you within the sale price. This simply protects us from people using the service as a free way of valuing their home or changing their minds after we has accrued significant time and expense in the purchasing process.
What if I can't afford the initial survey fee - even if it is refunded on completion?
If you are in a repossession or distressed situation, you may qualify for the waiver program and not have to pay the deposit required. In certain circumstances, The Home Alliance will waive the survey fee and pay for all associated costs and fees including the valuation on behalf of the seller. This involves a simple waiver contract/letter which simply asks the sellers for his/her total commitment to the sale.
If, for any reason, the seller has a change of heart or does not declare anything that causes the sale to fall through, they would be liable for all costs up to that point in the transaction. Obviously, if failure to complete the sale occurs for other unforeseen reasons, the seller will NOT be charged a penny.
Once my property has been purchased, what happens to my deposit?
Your deposit will be lodged with the Deposit Protection Service (DPS). It will be held in full until such a time as the tenancy agreement ends and the deposit is due to be repaid (including any interest earned). The DPS is there to act as an intermediary between tenant and landlord and safeguards the deposit until it is due to be paid back - either in full to the tenant or landlord, or a part-payment to each.
At the end of a tenancy period, should there be any disputes regarding the deposit, they will be handled by the DPS.
The DPS will write to you once the deposit has been lodged with them and you will receive your own identification number relating to the deposit you have made.
What happens if I miss a rental payment?
if you find yourself in the situation of missing multiple rental payments, The Home Alliance has the right to file a section 21 or eviction notice if the rent is not brought up to date (this process usually takes effect after 2-3 missed payments) which is pretty much the same as a mortgage eviction process.
Having said this, The Home Alliance understands the present financial climate. and works hard to reach an agreement with any tenants struggling to pay their rent. The Home Alliance has never lost / evicted a tenant and continues this perfect record in 2008.
Can I use my own solicitor?
Yes, of course. The Home Alliance are more than happy for you to use your own solicitor however, in this instance, we will make a maximum contribution of £500 to cover your legal costs so you may be required to pay for any additional fees.
It is worth remembering that any solicitors allocated by The Home Alliance are completely independent of The Home Alliance and act purely for the customer
Why am I not eligible for the share of profit scheme?
This product is offered to sellers that have more than 30% equity in their property. If this doesn't apply to you, we will offer you a different product that suits your situation so that we can get the best possible price for your property.
I fit the criteria for the share of profit scheme. Are there any conditions I must adhere to?
To be able to qualify for a share of the profit, you must be a tenant of The Home Alliance for a minimum of 5 years, in some cases 10 years. It is also imperative that you meet your rental payments on time and that you keep the property in a good state.
What if I want to leave the property before 10 years, or if I miss a rental payment?
If you wish to end your tenancy before 5 years, you will not qualify for a share of the profit. However, if you miss a rental payment or are late on a payment, The Home Alliance will allow a certain degree of leniency as long as missed/late payment is made up as soon as possible. Each case will be assessed on an individual basis but could result in any agreement made for a future share of the profit being void. Please note though, that if you miss more than 3 payments in succession, The Home Alliance have the right to pursue an eviction notice.
What happens if house prices are lower in 10 years time than they are today?
This is extremely unlikely as history shows that house prices rise by about 100% after 10 years. If you wish to move out, a valuation will be conducted and if it shows that house prices are lower than when The Home Alliance bought the property it also means there is no profit and therefore nothing to share. There is nothing to prevent you staying on as a tenant for more years though until house prices improve.
If I decide to stay as a tenant for 10 years, how do I know that the profit share will be honoured when I leave? The Home Alliance will provide you with a legally binding document that state the % share owing to you.
