Buying a house in negative equity.... do we have right?

stingray2

My partner and I have had an offer accepted on a house worth 128k.

We are 8 weeks into the purchase process and have signed our contracts,
we have been told now after 8 weeks that the sellers are in negative equity on the property and have to seek a loan to cover the remainder of the mortgage before they can complete.

Is this right that we ony know this now? If they can't sell the house we lose all the money paid for sols fee's not to mention an 8 week waste of time. There seems to be no protection out there for buyers?

Does anyone know how long it will take them to find a loan and get thier mortagae company to agree to release them as our mortgage offer will expire in 5 weeks and we can't get the same rate now ?

This is so frustrating as our solicitor is near to useless and isn't keeping us informed?

Any advice is welcome.

Claire:mad:

g_attrill

Have you actually exchaged? If you have then if they can't complete they are liable for your costs, possibly including your increased borrowing costs. If you haven't exchanged then I think you are stuck really, and can only get the various parties to chase everything along.

dunstonh

There seems to be no protection out there for buyers?

Welcome to the UK house buying process.

You could sue the other party but most dont because it can end up costing more than you get back and a lot of hassle in the process.

Does anyone know how long it will take them to find a loan and get thier mortagae company to agree to release them as our mortgage offer will expire in 5 weeks and we can't get the same rate now ?

about 15 minutes unless they are in a poor credit position. Then it could be weeks or even months.

This is so frustrating as our solicitor is near to useless and isn't keeping us informed?

There is a period in the process where everything goes quiet for a while and you think nothing is happening. Then suddenly after weeks, you start hearing news. That does not make the solicitor useless. There is no point them contacting you (and you incurring charges) when there is nothing to report.

herbiesjp

Do you know how much the shortfall is?

If it is a small loan needed, they should not have any problem assuming a clean credit history

stingray2

I'M NOT SURE HOW MUCH THEY WILL OWE, THEY BOUGHT THE PROPERTY IN 2006 FOR 130000.

But we don't know how much they may have borrowed after. The house has been vacant for a year or so so I'm guessing they were trying to wait and rent it to see if the market picked up. I just don't get how they are allowed to put the house up for sale with no guarantee they could actually sell it. It seems really un fair.

I was last updated last week so surely they know if they can get a loan or not now.

Claire

humphrey201

Hi Claire I am in a very similar situation at the moment. Me and my partner are have signed the contracts (but not exchanged) on a property and just found out that the seller has a second charge on it with a lender that has suddenly decided that they are not willing to release it. How did this work out for you? Any information/guidance would be very useful. Thanks

getmore4less

stingray2 wrote: »

We are 8 weeks into the purchase process and have signed our contracts,
we have been told now after 8 weeks that the sellers are in negative equity on the property .....

Is this right that we ony know this now?

Your solicitor could have found out sooner if they had checked.

JA1000

Go and knock on the door of the house you are buying and talk to them, if they don't want to you have lost nothing.

Everything doesn't have to be done through EA and solicitors, just talk to these people they are probably keen to sell and worried they will lose you. You will also get an indication as to how severe the problem is and whether you should just walk away.

Conrad

Nice how Claire is far too self important to thanks people for thier replies. Nice person.

VIGILANT22

getmore4less wrote: »

Your solicitor could have found out sooner if they had checked.

This was posted 16-11-2009, 1:45 PM

humphrey201

I have spoken to the estate agents about this situation and they have said that the seller is still very eager to sell the house. Both parties want this to go through and he is making every effort to persuade the lender to release the charge and have complied to all the rules they previously set out. It has just been a sudden change of heart by the lender to decide not to release the charge. Is there anything that would make them reconsider?