Seller to bear survey costs if he pulls out?

Alejandro

As above, is it ever 'the done thing' to ask the seller to agree in advance that if he changes his mind after accepting an offer he will bear the purchasers costs (survey etc) to that point?

I'm considering putting in an offer on a house which is currently rented out to tenants. The estate agent has made it clear that the tenants don't want to leave and have already offered to increase their rent, and that if the landlord doesn't get the price he's looking for, he might carry on renting it out rather than sell it. Part of this might be bluster on the part of the estate agent to makes me think i need to put in a high offer. But it also makes me think that there's a chance the seller might just be using the possibility of selling as leverage against the current tenants, so I'm concerned that I'll have an offer accepted and that he'll then negotiate whatever increase in rent he wants and pull out of the sale.

1. Am I being paranoid?

2. Would I be unreasonable to ask seller to agree to pay our costs if he pulls out? He's obviously not in a chain, so his reason for pulling out would only be that he's changed his mind.

3. Are there any other solutions to this conundrum I haven't thought of.

I appreciate that sometimes house sales fall through and that's tough luck for the buyer, but equally I don't want to be taken for a complete mug!

Yorkie1

1. Whilst the EA may be giving an accurate summary of the position, never forget that he works for the vendor and not for you.

2. You can ask for the moon, but I very much doubt you'll get it, as in England / Wales until exchange each party bears its own costs. It's not in the vendor's interest to move away from the standard position, particularly if you have been fully informed of the risks you bear and decided to proceed with an offer nevertheless.

3. You are in a chicken and egg situation. You don't want to offer until the Ts have gone. He won't decide what to do about the Ts unless you offer a decent enough amount. I would walk away.

Bear in mind that even if you make an offer which he accepts, you would be absolutely stupid to proceed to exchange contracts until the house is empty. The LL will need to give 2 months' notice to the Ts (assuming he hasn't started that already) ending at the end of a rental period. The Ts do not want to leave - and if they do not abide by the notice, the LL then has to go to court to obtain an eviction order. That is another month or 3. And if the Ts still won't go, bailiffs take longer again. And there's no guarantee of what condition the Ts will leave the house in...

KateLiana27

1. No, you are not being paranoid. There is a very real chance this sale will not go through, or at least be a drawn-out nightmare due to the tenants.

2. Unfortunately, yes, this would be unreasonable. Either party can pull out at any point up to exchange with no penalties, and I can't imagine any seller would agree otherwise. The most you can ask a seller is that they stop actively marketing the property. Any money you spend prior to exchange is at your own risk (whether it should be so is a whole other debate).

3. Personally I'd look for a different house. Sitting tenants are fine as long as they are willing and able to move out before completion. These ones aren't - so you could be in for a nightmare. Particularly as the vendor himself sounds quite ambivalent about whether or not he wants to sell. You are right that any sale can fall through - but you will be vastly increasing your risk of being in this situation if you try to buy a property like this.

Alejandro

Thanks both of you - just the sort of answers I was hoping for.

The only thing 'in my favour' is that the house has been on the market a while without finding a buyer, so I thought the seller (if he's genuine about wanting to sell) might be happy to agree to it in order not to lose me as a buyer. Obviously he won't agree it if he's thinking of messing me about, but if that's the case I don't want to get involved anyway.

Do you think no harm in asking (on the basis that I won't make an offer otherwise), or really not even worth bothering?

The problem is that I do actually like the house!!

FATBALLZ

Waste of time trying to buy a property for personal residential use if it has tenants in. It could take 6 months to get them out. Find something else.

Yorkie1

The reason it's been on the market for a while is probably because he's messing others around as he is you. He wants his cake and to eat it.

There is nothing stopping you from talking to him. But how will you know whether he means what he says? He will probably say anything which he thinks you want to hear in order to get you to offer.

Decide how much the house is worth to you and offer accordingly. But try to protect yourself from your fears. I don't know how feasible this is, but perhaps make the offer conditional on receiving confirmation from his solicitor within say 7 days of acceptance of offer that the s.21 notice has been served on the tenants. Get your mortgage application and solicitor lined up but don't allow them to do any work until you've received that confirmation.

Bear in mind that the Ts are under no obligation to allow the surveyor access to carry out the valuation / homebuyer's etc survey...

And don't exchange until the tenants are out, you've inspected the house for damage etc.

This really does potentially have nightmare written all over it. It is really the only house for you and does it have to be right now?

Alejandro

Yorkie - if I do ask for it, then I would expect to have something from him in writing agreeing to pay up if he pulls out. Not bombproof I know, but I'd be happy to take the risk if I had that.

Good idea about the s.21 notice, although I suppose that doesn't stop him withdrawing the notice and allowing the tenants to stay.

Hmm, will have to ponder some more...

G_M

Waste of time. And legally very difficult.
What if the survey throws up some minor problem (ALL surveys show up minor problems), you ask for a price reduction, seller refuses. Who has 'pulled out'? You believe the property is now worth less, he disagrees.

Bottom line is he should not be selling while tenants are in plae. That's why it is not selling cos no buyer is mad enough to progress till the tenants are out.

Walk away.

jamesd

My landlord told me he was putting the place on the market. I went off and bought somewhere else before he'd even had a chance to get the estate agent's work done. A year later it's still unsold and there have been just two viewings. It's not risk free for a seller to put the place on the market or to have tenant out first, you also have the option of not completing the deal.

It's a buyer's market in most of the country. You can explain your concern and ask. It's not an unreasonable concern.

Don't be unreasonable in the risk balance here if you want to get the deal done. Tenants out before offering and agreeing the purchase isn't good but ensuring that they can be expected to be out before the deal closes is. You should also ask for an explicit undertaking on costs and delay payments if the tenants don't leave when their tenancy ends and it takes a few months to evict them.

Also be sure that you get photographs of the condition and agreement for the seller to restore the condition if there is extensive damage done between you looking and the deal completing. Tenants do sometimes engage in such unpleasant actions when they didn't want to leave.

franklee

If the tenants aren't out by exchange of contract there is the risk that completion is late if the tenants don't leave when the notice asks or the tenants might cause damage to the property. A tenant has every right to remain after the S21 notice period is up and await the landlord getting a possession order and enforcing it. Also it's quite common for a landlord to make mistakes in the notice and have to start over. Strictly speaking those are the seller's risks but the buyer has the inconvenience they cause and the problems associated with enforcing their rights so it's often suggested not to exchange before the tenants have vacated and the property inspected. The problem is if the landlord wants to get rent up till the last so wants to leave serving notice until the sale is secure, serve notice before exchange and the landlord may lose the sale and still have the tenants leave ...

pararct

Why not consider looking at the property telling the seller you are interested and will happily make an offer once the S21 has been served, (requesting sight and a copy of it in the process). You could always then let your solicitor glance over it and ensure all is well with the document. Once a price is agreed you could drag your feet a little and instruct the surveyor a Month in and of course a Month closer to eviction proceedings. Once all this is done you may have a bit of leverage to insist the owner instigates the eviction action prior to exchange taking place?

No guarantees this would work but it sounds like a plan?