“Try Before You Buy” offers are the “new thing” on both sides of the Atlantic these days. Almost unheard of five years ago, “try before you buy” offers to rent in Connecticut, New York, Idaho or in London serve both buyers and sellers amidst this now changing real estate market. Sellers can generate rental income on property that “is available for sale” and buyers can “experience” homes/condos/apartments and neighborhoods to see how they “feel” before plunking down cash and/or a large down payment.
Some experts say that the concept of trying before buying is perfect for this volatile time as interest rates rise and the stock market loses its edge. It allows potential homeowners a chance to be sure they’re making the “right choice.”
“In a market where there is now plenty of inventory, buyers are not afraid to take their time, do their research and ensure they feel they are making a good decision,” said Stephanie Anton, president of Luxury Portfolio International.
“We’re a long way into this current real estate cycle,” said Christopher Mayer, co-director of the Center for Real Estate at the Columbia Business School. “It’s not surprising to see things slow down…to see buyers and sellers be more discerning.”
Dan Scott, the president and general manager of The Whitetail Club in Idaho, said “…try before you buy is an outgrowth of the housing crash and recession 10 years ago which made the buyer skittish. With try and buy offers, the experience is the selling point, not the home.”
Becky Fatemi, managing director of the London listing agency Rokstone, believes “try before you buy” works for both parties. “It gives the tenants a home and time to get to know the property and it provides the vendor with rental income.”
Fatemi has been handling a try and buy mansion and penthouse opposite London’s Buckingham Palace. The property rents as a “test run” at $61,223/week and “…is ideal for an international family from overseas relocating to London.” If the tenant likes the property, the tenant has the first opportunity to buy the property at a discounted sale price that reflects the already paid rent.
Some developers in large, high-end metros (Seattle, NYC, etc.) and in prestigious vacation destinations (San Jose de Cabo Mexico) are now building their marketing plans around this try and buy concept to encourage potential consumers past the uncertainty of the times. In other cases such as in Connecticut where decisions about permanent residence are concerned, renters/buyers are making their decisions based upon practical realities (schools, commutes, community amenities) as well as experiential reasons.