RE: signed missves but cannot raise deposit

roamingrager

Hi,

We are in dire situation as such we bought off plan about a year ago but now running short of deposit as we had to put money elsewhere (family member's health treatment :-(

Now as we have signed the missives, what are our options (we are in Scotland). can we simply back out? The move in date is end of next month but we are about 8K short of deposit amount.

SP123_3

You need to take proper legal advice on this, but when missives are concluded the sale is legally binding. Therefore, if you pull out I believe the buyers can sue for any costs incurred (surveys, home report, legal costs and mortgage costs), plus, I believe, any additional costs that arise because they then have to buy a different house which is more expensive. You could easily be looking at a lot more than £8k.

See you solicitor, pronto.

googler

You need to consult YOUR solicitor, who hopefully isn't a solicitor provided for you by the builder to see what your options are.

Most folks on here are likely to be from England-shire or Wales-land, and it wouldn't surprise me if I turn out to be the only one who posts in reply to you.

I can't comment on whether or not the builders may/will sue you for their damages if you do back out, but it's a possibility, certainly.

If you've exhausted all the possibilities for raising finance; family, friends, banks, garage sales, eBay, etc., then maybe it would be best not to move?

The benefits of a Health Insurance policy have become apparent here....

SP123_3

Sorry, just realised you are the buyers, but fundamentally the same rules apply - you'd have to stump up for legal and re-marketing costs, plus if the property is resold for less than you were prepared to pay, you can be pursued for the difference.

googler

SP123 wrote: »

Therefore, if you pull out I believe the buyers can sue for any costs incurred (surveys, home report, legal costs and mortgage costs), plus, I believe, any additional costs ....

No, no - they're buying, so it's the seller - the builder - who will be after them - so no surveys, no Home Report or mortgage costs - but possibly an arbitrary figure based on their loss of income until they do sell the reserved house.

roamingrager

The solicitor is am afraid the one they provided. As we are first time buyers, being naive (or rather foolish), we didnt bother with the independent route and now stumped.
Its the builders who might be after us. But we have already given them an indication that we are running short of deposit. Having a mortgage on our name no one is prepared to give us the personal loan until we possess the house which is a catch 22 situation.
Really tensed and worried now!

googler

How much do you need, and how long have you got to get it?

roamingrager

about a month to find 8K or thereabouts :-( got about 10.

googler

Assuming you've truly exhausted all avenues for raising the money, it's tempting to suggest you bite the bullet, and; take independent legal advice, possibly hire another solicitor to advise you; then set aside the £10k you have already to (possibly) pay the builder's expenses etc which they may pursue you for.

There's always the slim possibility that they have other clients waiting for you to drop out from your purchase, and if they can line up somebody else quite easily, they may not be at too much of a loss. If your house is the only one of its kind on the estate, for instance......

chappers

Have you tried speaking to your mortgage provider and seeing if you could increase the loan amount by £8K and therefore reduce the deposit.

Speak to the solicitor immediately, whilst he may have a financial interest with the builder, he must still act within your best interests, also in this case him being close to the builder may act in your favour.He may be aware of others in your situation and how they may have resolved the problem.

After that I would take googler's advice and find an independant conveyancing solicitor, a couple of hours with him may well be worth the money.

Also have you tried speaking to an IFA/IMB who may be able to sort you an alternative mortgage/some short term finance.