Diary of a house sale disaster

morg_monster

http://www.thisismoney.co.uk/mortgages/article.html?in_article_id=447091&in_page_id=8

Just read this on This is Money so presumably is also in the Daily Mail today. It is a very sad story and I'm sure one which will be repeated thousands of times over the next few years. And does serve as a cautionary tale to those middle/upper middle classes who think the credit crunch could never affect them in a serious way. I started off snorting in disbelief at her "woe betide me" tale which included private schools and BMW X3s, but did eventually have some sympathy - sounds like classic asset-rich, cash poor who spend money rather than saving. Seems like a lot of hard decisions need to be made, but this woman isn't willing to take those steps (yet). I did find myself wondering though, why the dad, with 4 kids, at private school no less, and a 6bed house, didn't have life insurance and presumably no decent pension.

Can't believe the cheek of the buyer, claiming to be a cash buyer and then repeatedly gazundering before finally it comes to light that she does need a mortgage after all. Sneaky cow.

frugalpam

She needs to post her SOA on the DFW board
But - she needs to take hard look at her outgoings. If the gas guzzling car hasn't been sold, then it needs to go. She could take in a lodger, and the children will have to come out private education. As she said, she's got a big overdraft and thousands owed on credit cards - so she's also paying out a lot of money in interest.
She has to accept she can't live her current lifestyle on her income. Simple economics.

morg_monster

That's the thing, must be a hard adjustment to go from being basically loaded with 2 salaries to suddenly being just on a dental hygienist/nurse salary bringing home £1500 a month. She just isn't living within her means - 3 kids at private school on that salary?! I bet she's not claiming tax credits either because she still probably has the mindset that she is well-off. Definitely needs a lightbulb moment. Must be hard.

frugalpam

I agree - she's not really confronted the reality of her situation and that she simply has to cut her outgoings, or find a way of bringing in more income e.g. a lodger. I do feel for her - must be many of us here, myself included, who had a 'lightbulb' moment and confronted the realities of our financial situations.

carolt

Incredible. If she really can't afford it, maybe the school would offer some kind of scholarship? If not, then time to leave the BMW, private schools etc. Not clear how she thought her lifestyle was ever going to be sustainable long-term. Or was she just gambling on rising HPI?

Bewildering.

Sapphire

It's a classic case of someone living well beyond their means. Many people in this country have been seduced by advertising and 'celebrity culture' into a 'must have' way of thinking. They need to have far less high expectations, like they used to, and to learn that you cannot have something for nothing. This woman could do with far less and still have a happy life.

Sorry, but I can't feel much sympathy for her.

I hope taxpapers' money will not be used to bail out people like this.

morg_monster

She probably didn't bank on her husband dying when she had 3 small children and a baby to look after, to be fair. Who are we to say that she should have "got used to it" by now? Plus, it was probably her husband who was in charge of all the finances and mortgaged them up to the hilt with that huge house and didn't make any preparations for this worst case scenario; she has now got to cope with it with probably none of the necessary skills.

I personally think she does deserve some sympathy. I hope she has some friends with their heads screwed on who can guide her to a solution that is sustainable in the long term.

dhassen

sorry, but it's been 8 years since her husband died....... and only now she realises she can't afford to live in a 400K house and spend 20k a year on school fees whilst earning 25K a year?

Jimuth

She deserves some sympathy, of course, but the prole in me found that article hard to read and I couldn't read it past her "I was livid they offered x amount less... how dare they!" etc. frustrations.

You don't need to send your kids to private school you know or drive a beamer. Her hubby died 8 years ago, meaning the youngest was in vitero or new born ... she could easily have comp'd. As could the younger children when starting secondary school.

Still, bet this story registers harder with the AB's than sink estate poverty where the existence of the next meal is unknown...

It's also a good reminder to make sure you've got life assurance!

lostinrates

dhassen wrote: »

sorry, but it's been 8 years since her husband died....... and only now she realises she can't afford to live in a 400K house and spend 20k a year on school fees whilst earning 25K a year?

I know other peole who are still restricting/crippling themselves similarly -financially or otherwise- 8-10 years after bereavement. Two separate people leap to mind. Of course the woman needs to come round and face the reality now, but its easier said than done. Quite frankly if it happened to me I'd probably be hiding from the reality too. Of course I agree that she has to come round, but I also feel compaionate towards her.

morg_monster

I'm sure she was/is in denial. Probably hoped house prices would continue to increase and she could continue MEWing. Didn't think about what might happen in the future; just wanted to keep everything the same for her kids. The youngest kid is 8 - she claims that she didn't want them to have to change schools but the youngest one must just have been a baby.
You know, outside of MSE there are a lot of people who have no clue about anything financial or the housing market. I mean just look at the repeated posts on the house board saying "FTB - is it a good time to buy?". How can these people learn if all their friends and families are similarly "ignorant" (that word has negative connotations but I just mean it literally) and they think they have no reason to seek advice?