Agent's company blocking house sale

Djinnie

My partner and I have found our first home and have hit a snag with the estate agents. We have a Mortgage in Principle with a 10% vendor gifted deposit. We have found a property we are interested in and put in an offer of the ticket price (£109950). The seller has agreed to terms accepting that 10k of that will cover our deposit. The mortgage was not attained through this estate agency. All good so far until the Estate Agent is now claiming that the sale cannot proceed as the parent company do not allow houses on their books to be sold with more than a 5% VGD. Does the company have a right to block the sale even if all parties are in agreement with the details? Would the vendor have to know this rule when she asked them to represent her house? Any advice greatly appreciated Djinnie

brightonman123

vendors agent not taking the loan risk, so cant see what their problem is, otr indeed why they COULD object. and any leder gets good equity (loaning 10% less than value of house.. or am i missing something?)

poppy10_2

It's probably the mortgage company that's blocking the deal. Vendor gifted deposits are always dodgy, and you are putting no money down yourself - essentially you are buying a £100,000 house and getting a £100,000 mortgage on it. I can't think of a single lender that is agreeing such deals in the current climate.

Djinnie

Its not the mortage company. Mortgage is through my FTB center and is from Halifax. The estate agent the vendor is using is different again and the parent company is Countrywide. Countrywide are blocking the transaction. Again Myself, My Mortgage and the vendor all agree on the 10% VGD

noh

The estate agent has no power to block the sale.
If you and the vendor agree and the mortgage is in place as you say then both you and the vendor instruct solicitors and the sale goes ahead.

Nigel

Richard_Webster

Are you sure the lender does know about the gifted deposit? Mortgage arrangers have a habit sometimes of "dressing up" these arrangements so that when eventually your solicitor informs the lender (as he is professionally bound to do) about the gifted deposit, they pull the plug.

Also the nature of the gifted deposit is important. If the reality is that the seller could not sell the place for £109950 to anyone else and is doing this to achieve a sale somehow, then the lender would be wise to ignore the "deposit" and downvalue the proeprty accordingly. On the other hand, if the seller could find another buyer who would pay £109950, but is making a special concession to you because you are his best mate, father in law, some other relative etc. then possibly the lender might accept it.

Djinnie

Well she hasnt been able to sell the house and the best offer she has received (so they tell me) is 90k before our offer. Our mortgage was totally dependant on the 10% VGD and the FTB offices we are using stand by the fact they can attain this. Its something they have worked with Halifax.

Does anyone know of this rule countrywide have? I saw the text while in one of their estate agents stating they cant accept anything more than a 5% VGD.
As it stands i have 'told' the estate agent that i have the deposit covered as a gift.

He doesnt need to know any other information as from here he said solicitors deal with the rest.

pinkshoes

Gifted deposits aren't looked upon favourably, particularly if it makes up the whole deposit, because if you haven't been able to save up your own deposit, you are a much higher risk to the lender (and statistically more likely to get repossessed...).

It wouldn't surprise me if the sale no longer goes ahead.

Why haven't you saved your own deposit? Why don't you wait until you HAVE saved 10%?

Conrad

I'm fairly sure the lender will block the sale anyway.

The issue is value.
You said the highest offer was £90k prior to yours.
The Halifax will consider the price you are paying is too high, and that you only agreed to it in view of the 'deposit sweetener', and herein lies the problem; If you get repossessed there will be no deposit sweetener on offer, hence the property could be sold for less than you owe.

All these gifted deposits are pretty much a thing of the past.
Furthermore, from memory Halifax only allow gifted deposits between parents and children.
Your broker sounds a little suspect to me - unless he's ahead of me on criteria.

Djinnie

While i apperciate my mortgage lender can call off the deal when the survey comes back thats not what im botherred by.

My concern is that Countrywide are refusing to sell a house on their books as they dont accept sales with more than 5%. Is this againsnt a code of conduct or anything with regards to their jobs representing the vendor.

I don't know the vendor before we started this and we dont have a the savings/rich parents etc. Of course we can wait another couple of years to save but then im gonna be over 35 and i hear mortgages are harder to get as i get older?

Also does rule 10.a from the EAO kick in?

Thanks alot for all the help

silvercar

Maybe countrywide have this rule to prevent heartache further along the process. If they know you can't get a mortgage with more than 5% vendor deposit, they may as well say they don't accept such offers because they know they are not proceedable. Better to get an offer from a buyer capable of proceeding, albeit at a lower price.

If you want to play them at their own game, you can tell them that you will buy privately, if they don't want their commission.