vendor in negative equity - what next?

ab7167

Have just found out that the propety we made an offer on is in negative equity.

2 weeks after we made the offer, the vendor has only just got around to getting redemption statements from the 1st and 2nd charge holders, only to find out that there will not be enough from the proceeds of the sale to clear both charges.

The EA is still insisting that we can exchange 5th Feb and complete 12th Feb - I am pretty sceptical that this timescale can be acheived, especially as there is a noted interest from an Insolvency Practitioner noted on the deeds, which our solicitor says that they need his/her permission to sell the property.

The IP has apparently stated that he has no interest in the proceeds of sale, but has to file a form with the LR stating this - presumeably we cannot exchange until this has taken place, but this could take a couple of months to appear, apparently?

I am pretty livid about the whole thing, the short timescale was at their insistance (although I am 36 weeks pregnant and a swift move would suit us also) - but do we even stand a chance of this working, or does the negative equity mean the house is unsaleable?

We incurred costs on a house before Christmas that fell through due to an historical boundary dispute that turned out to be very much current - I cannot believe this is happening to us again. We sold our house on Friday, are living with in-laws and I am slowly reaching the end of my tether.

We have started house viewings again, but we would like to complete on the one we offered on, if anyone would tell us what the <bleeping> heck is going on! Our solicitor is having difficulty geting information out of the other side

Next problem is that vendor is using a bargain basement internet conveyancer, who don't seem to answer either email or phone.

Help in desparation! Any comments or experience of this situation would help. We have a mortgage offer, we have deposit sat with solicitor from sale of house.

Fire_Fox

Recorded delivery letter to the internet conveyancer? Won't the estate agent or vendor chase them?

DVardysShadow

At 36 weeks in, you must be feeling under pressure, but I think you need to refocus. If this one works out or does not, you are going to have very little influence, unless you make up any shortfall, which I assume you won't. You are far too close now to rely on EA promises - or even to spend time firming them up.

So, I think, relax, change your focus to ensuring you have a stable and happy place to be for the new baby - and if the house works out, well OK. Maybe even tell the EA that the deal is off till after the delivery, just for the sake of not living in uncertainty.

PottyHouse_2

Hi, same thing happened to us 2 weeks before Christmas. Our Solicitor (who is excellent) said in their opinion it is not normally good news when there is a second charge, negative equity and in our case they didn't even have £10 to pay for a window certificate.
Same thing with you, our Solicitor couldn't get much information from Vendors solicitor - due to "Confidentiality" - what a joke - you are trying to buy their house!
Anyway, we took their advice and trusted their judgement and we pulled out of the sale as we were advised it could take quite a while to sort this out (months not weeks??) - we were actually ready to exchange contracts with them but they obviously not with us.
We are glad we did pull out as the house was not for us anyway, so was lucky escape.
Their house went back on the market just last week at exactly the same price so not sure what is going on there now.

I sympathise with you especially as you are pregnant - try not to stress about it - as they say "whatever will be will be".

Hopefully you have a good solicitor and I personally would put my trust in them and not the EA as this is a serious LEGAL matter!

PottyHouse_2

DVardysShadow wrote: »

At 36 weeks in, you must be feeling under pressure, but I think you need to refocus. If this one works out or does not, you are going to have very little influence, unless you make up any shortfall, which I assume you won't. You are far too close now to rely on EA promises - or even to spend time firming them up.

So, I think, relax, change your focus to ensuring you have a stable and happy place to be for the new baby - and if the house works out, well OK. Maybe even tell the EA that the deal is off till after the delivery, just for the sake of not living in uncertainty.

Hear hear ! Completely agree.

ab7167

there have been emails,faxes, and letters to the vendors conveyancer and all they seem to get back is an acknowledgement that it has been received, but no actual information!

we will not be making up any shortfall and we will not be exchanging until this is sorted. there is also the issue that they want to use our deposit going forward, which our solicitor has said under these circumstances is a VERY bad idea, but the EA thinks they won't be able to afford to move if they can't? I thought they were going into rented accomodation, so why would they need our 10% deposit, deposits on rental places surely are not into the tens of thousands of pounds?

I think concentrating on my baby and my daughter (aged 2) is really the only way forward now. and maybe a nice back massage, or leg wax - I can't reach my ankles anymore!

PottyHouse_2

ab7167 wrote: »

there have been emails,faxes, and letters to the vendors conveyancer and all they seem to get back is an acknowledgement that it has been received, but no actual information!

we will not be making up any shortfall and we will not be exchanging until this is sorted. there is also the issue that they want to use our deposit going forward, which our solicitor has said under these circumstances is a VERY bad idea, but the EA thinks they won't be able to afford to move if they can't? I thought they were going into rented accomodation, so why would they need our 10% deposit, deposits on rental places surely are not into the tens of thousands of pounds?

I think concentrating on my baby and my daughter (aged 2) is really the only way forward now. and maybe a nice back massage, or leg wax - I can't reach my ankles anymore!

Trust your Solicitor !!!

If Vendor can't afford to move without your deposit THAT IS THEIR PROBLEM - ok you probably want that house but don't feel like you owe them any favours!!!

Sounds more like they need your deposit to pay off debt? It doesn't sound right does it ?

I have nothing against EAs but they just want to sell houses and get their commission .... Solicitors are there to do all the legal crossings and dottings and make sure everything is 100%.

We weren't sure what to do for a couple of days but we just realised in our circumstances it just didnt feel right and we didn't want to go further with something that we might not be able to get out of and then regret it.

You need to be relaxing now in your last couple of weeks not stressing over something like this - it isn't worth it. You have to keep you and your baby safe (can you tell I'm a mum too !!!???).

I hope you get some replies from someone in the Legal Field that will help you too.

Good luck.

Fire_Fox

Your solicitor is undoubtedly more qualified than the estate agent. Secondly the solicitor works in your interests and the estate agent works in the vendor's interests.

ab7167

Ah, this all happened about 2pm yesterday and my bad twitchy feelings about the whole thing have just been getting worse. The sellers information form is riddled with mistakes - they claim to be paying £2500 per year in council tax, which is ridiculous - and wrong, according to the LA website! They have obviously (to my mind) have arrears from a previous year and have not separated out the yearly charge from the arrears.

Have been discussing with OH, and I think we are minded to leave them to it, to be honest. Unfortunatley - I feel for them - they are moving out next week and apparently have already signed a rental contract, but we haven't exchanged, so surely they can't have gone for a rental on the basis of an offer? Nothing is final until exchange, surely? They are not going to be able to afford mortgage and rental if they are in this much financial difficulties...

PottyHouse_2

ab7167 wrote: »

Ah, this all happened about 2pm yesterday and my bad twitchy feelings about the whole thing have just been getting worse. The sellers information form is riddled with mistakes - they claim to be paying £2500 per year in council tax, which is ridiculous - and wrong, according to the LA website! They have obviously (to my mind) have arrears from a previous year and have not separated out the yearly charge from the arrears.

Have been discussing with OH, and I think we are minded to leave them to it, to be honest. Unfortunatley - I feel for them - they are moving out next week and apparently have already signed a rental contract, but we haven't exchanged, so surely they can't have gone for a rental on the basis of an offer? Nothing is final until exchange, surely? They are not going to be able to afford mortgage and rental if they are in this much financial difficulties...

Until you exchange and sign contracts you are not legally obliged to do anything - yes, that is good and bad I think - you can pull out at any time and they can pull out of the sale at any time.
Yes it's a pain in the backside that you may have spent legal fees and valuation fees etc and vice versa for them - but it happens all the time.

That is why it is so stressful moving house - why do we do it !!!????

DVardysShadow

ab7167 wrote: »

Ah, this all happened about 2pm yesterday and my bad twitchy feelings about the whole thing have just been getting worse. The sellers information form is riddled with mistakes - they claim to be paying £2500 per year in council tax, which is ridiculous - and wrong, according to the LA website! They have obviously (to my mind) have arrears from a previous year and have not separated out the yearly charge from the arrears.

Have been discussing with OH, and I think we are minded to leave them to it, to be honest. Unfortunatley - I feel for them - they are moving out next week and apparently have already signed a rental contract, but we haven't exchanged, so surely they can't have gone for a rental on the basis of an offer? Nothing is final until exchange, surely? They are not going to be able to afford mortgage and rental if they are in this much financial difficulties...

They do look to be in a mess both in terms of their admin skills and their finances. But you can't be influenced by that. Do remeber that they have let you down by wasting your time and money on a sale they cannot complete on.