Common Alternatives to Disposing Real Estate

Except for the common sales carried out by real estate agents, there are some other common ways in which a property owner can dispose of property. Some of them are.

1. Auction.

Auctions allow the highest bidder to purchase property, so long as the price is higher than the minimum price the seller will accept (the reserve price). An auction could be private or open to the public.

2. Sale and Lease Back

A good way to entice an investor to buy your property is o guarantee the investor good annual returns in the form of rent. This can be done by selling the property to the investor and immediately leasing it back at a good rent the buyer will find attractive.

3. Real Estate Exchange.

Where a seller wants to dispose of property to acquire another asset, the property can be exchanged at an agreed value for the new asset. If the value of the new assets is higher than the property value, the seller will need to pay the balance in cash and vice versa.

4. Joint Ventures.

A seller can realise value by contributing the property into a joint venture with a property developer for development or redevelopment to generate higher returns. Each joint venture partner receives returns commensurate to the value of their contribution.  

5. Option Sale

One restriction that usually prevents buyers from buying into a property could be the number of unclear restrictions put on the property which could determine if the investment is good or not. This is commonplace with large parcels of land or massive properties needing remodelling or reconversion.

A seller can decide to sell an 'option' to the buyer, which binds the buyer to purchase the property at an agreed price if conditions are met. Such as the use to which the buyer wants to put the property is allowed. Such a condition makes the option a sale.