Factors When Choosing Between Equity Sharing Agreements vs. Selling Property Outright
Equity sharing agreement vs. selling property outright: what to consider
When it comes to deciding whether to sell your property outright or enter into an equity sharing agreement, there are a number of considerations to take into account. Here, we outline some key points to bear in mind.
Introduction
If you're thinking of selling your property, you may be wondering whether to sell it outright or enter into an equity sharing agreement. There are a number of things to consider when making this decision, such as your financial situation, your future plans and your relationship with the buyer.
Here, we outline some key points to bear in mind when deciding whether to sell your property outright or enter into an equity sharing agreement.
Financial considerations
One of the main things to consider when deciding whether to sell your property outright or enter into an equity sharing agreement is your financial situation. If you sell your property outright, you will receive a lump sum of money that you can use as you wish. However, if you enter into an equity sharing agreement, you will receive regular payments from the buyer, which may be helpful if you need a steady income.
It's also worth bearing in mind that, if you sell your property outright, you may have to pay capital gains tax on the sale. However, if you enter into an equity sharing agreement, you may be able to avoid paying this tax.
Future plans
Another thing to consider when deciding whether to sell your property outright or enter into an equity sharing agreement is your future plans. If you sell your property outright, you will no longer have any ownership stake in it and you will need to find somewhere else to live. However, if you enter into an equity sharing agreement, you will be able to stay in your property and continue to live there even after the buyer takes ownership.
This may be particularly important if you're planning to downsize in the future and you want to stay in your current property until you find somewhere else to live.
Relationship with the buyer
Another consideration when deciding whether to sell your property outright or enter into an equity sharing agreement is your relationship with the buyer. If you sell your property outright, you will have no ongoing relationship with the buyer and you may not even meet them in person. However, if you enter into an equity sharing agreement, you will need to maintain a good relationship with the buyer as you will be living in the same property.
This may be something to bear in mind if you're selling your property to a family member or friend.
Conclusion
There are a number of things to consider when deciding whether to sell your property outright or enter into an equity sharing agreement. Financial considerations, future plans and your relationship with the buyer are all important factors to take into account.
© 2024, Exuity