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Just a thought on house buying
BobProperty
Posts: 3,245 Forumite
Before I attempt an ouvre on improving the buying and selling process, I just had the thought that the times when the sale falls though (and possibly the chain collapses), is there a significant proportion of "borderline" financial arrangements?
What I'm getting at is that sales fail because purchasers are at their financial limits. e.g. Guy Richie and Madge just pick somewhere and then get their accountants to be creative over how to buy it. No pulling out because the bank said they could only have a mortgage of £122450 and the valuation came back at £124500 (and the vendor wanted £125000) and it's supposed to be 100%. Or the buyers were going to make up the deposit by a cash advance on a credit card but if they do that they can't afford x,y and z that they need for the house. Or they forgot about the stamp duty cost.
Ok - you get the picture? Now would any of these situations have been a problem if the buyer had, say, 5% contingency in readily accessable funds? Interestingly, if you were building a house, you would be seriously advised to have a contingency fund of up to 20%, yet when buying somewhere very few people bother or make sure they are in that financially safer situation.
What I'm getting at is that sales fail because purchasers are at their financial limits. e.g. Guy Richie and Madge just pick somewhere and then get their accountants to be creative over how to buy it. No pulling out because the bank said they could only have a mortgage of £122450 and the valuation came back at £124500 (and the vendor wanted £125000) and it's supposed to be 100%. Or the buyers were going to make up the deposit by a cash advance on a credit card but if they do that they can't afford x,y and z that they need for the house. Or they forgot about the stamp duty cost.
Ok - you get the picture? Now would any of these situations have been a problem if the buyer had, say, 5% contingency in readily accessable funds? Interestingly, if you were building a house, you would be seriously advised to have a contingency fund of up to 20%, yet when buying somewhere very few people bother or make sure they are in that financially safer situation.
A house isn't a home without a cat.
Those are my principles. If you don't like them, I have others.
I have writer's block - I can't begin to tell you about it.
You told me again you preferred handsome men but for me you would make an exception.
It's a recession when your neighbour loses his job; it's a depression when you lose yours.
Those are my principles. If you don't like them, I have others.
I have writer's block - I can't begin to tell you about it.
You told me again you preferred handsome men but for me you would make an exception.
It's a recession when your neighbour loses his job; it's a depression when you lose yours.
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Comments
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Must be - look at the number of self cert mortgages these days.People are seriously strapped because prices are so high. It's pretty normal for FTBs to be strapped in normal conditions, much less now.
Lately I've noticed a lot of established owner occupiers are now selling first and renting for a while before rebuying. Though this "STR" idea might have started off because people thought they would profit from any price crash, it looks to me like people are now doing it to escape from chains (and also because there is now a good choice of nice rental flats to move to.)
Also if you look at estate agents ads, the words "No chain" are appearing more and more often.
I'd guess breaking chains are much more of a problem than failed surveys, especially if only 20% of buyers get them.Trying to keep it simple...
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