How the Model Works
Under the proposed model, a professional investor company first evaluates the property and the transaction. After professional valuation and due diligence, the seller and investor company agree a sale price and commercial terms in writing. The investor company then works within the agreed period to identify and complete the resale to an end buyer.
- Pre-Agreed Seller Price. The seller’s commercial sale price is agreed in advance after property assessment and professional valuation. The purpose is to give the seller greater clarity about the agreed transaction value during the defined period, rather than repeatedly renegotiating the seller’s price because of normal market movement. The exact legal effect of the agreed price must be stated in the final contract.
- Advance / Security Amount. A transaction may include an advance or security amount, typically discussed within the proposed 10–20% structure where commercially and legally agreed. The exact amount, payment trigger, refund/adjustment conditions and consequences of default must be written into the contract.
- Defined Lock-In / Transaction Period. The proposed model can use a defined 3–4 month transaction period. During this period, the investor company works on resale. The exact start date, end date, seller obligations, investor obligations and extension rights must be clearly documented.
- Seller Deals with the Professional Investor Company. The seller’s immediate commercial relationship is with the investor company under the written transaction documents. This can simplify communication because the seller does not need to negotiate separately with every prospective end buyer. The precise legal structure should always be reviewed by a qualified lawyer.
- Banking-Channel Payments. Payments should be made through traceable banking channels such as bank transfer or cheque as agreed in the contract. Cash arrangements should not be presented as part of the standard model.