Checking your Buyers Progress

Shrimp_Stu

I wanted to know if anyone has experienced our current situation and how they got on:

We have sold our house to someone who has a first time buyer purchasing their house. We have found a property where our offer has been accepted and there is no onward chain.
We had our offer accepted 5 weeks ago, and we accepted the offer for our current house 4 weeks ago , our buyer actually pulled out last week but then came back in a few days later after their FTB committed back to the chain.

The sceneario ("Chain") is
First Time Buyer -> Seller -> US -> Our New House

Now we have instructed our solicitor who has conducted searches on our new property (cost £125). We have our mortgage offer in place and need a "HomeBuyers" survey (cost £490) to be carried out on our new house as it is a 1930's house.
Now, we nearly lost this £490 because our purchaser pulled out as their FTB withdrew their offer (see above), luckily the building society hadnt conducted the search for us and still have our £490 cheque ready for our survey.

The problem is I dont want the person whose house we are buying to think that we are not progressing , I want to start the valuation but dont want to commit until I know how my purchaser is progressing on our house (they have already changed solicitors since we accepted their offer).

Also, I have heard that because my current house is still covered by the 10 Year NHSBC cover that a valuation for mortgages is not required (I dont think that is right though ??)

And finally, I want to lay a 15% deposit on our new house through the equity in our current property, can I do this through my solicitor as I remember last time we moved we had to give him a 10% deposit (luckily we had that money available that time), but we donot have 15% readily available for our deposit.
We are borrowing 85% of our purchase price.

Any advice / pointers on how to make me feel at comfort would be greatly welcome, or is this sll to be expected when moving house !!!
Thanks
SJ

Debt_Free_Chick

I think it might help to consider two issues as being entirely separate.

Are you committed to buying your new property? If yes, and it's then simply a matter of selling your own house, then there's no reason why you shouldn't line everything else up now. So go ahead and get the survey done. Personally, I would not delay this. You don't know anything about the property (other than what you've seen) without this. What if it reveals expensive remedial work? Would you still buy? Would you want a price reduction? You don't want to be considering these things late in the day. Get the survey now.

Once you have lined up everything for your new purchase, the only thing holding you up is selling your own property. Once the buyers commit, you are "ready to push the button" as everything is in place with the property you are buying.

You don't "lose" the survey if your buyer pulls out. The survey on your new house is for you to decide that you want to buy it, in the condition that the survey reveals, at the price you've offered. If your buyer pulls out, then it doesn't matter. You don't need another survey on your new property.

As for the deposit ... this comes from the sale of your existing property. You actually do a "simultaneous" exchange. So you exchange on the sale of your current property ... your buyer puts their deposit with your solicitor. Your solicitor then exchanges the contract to buy your new property, knowing that the sale of your property is now going through (as you've just exchanged on that).

You say you are borrowing 85% of the value of the new property. Do you need this much? You only need the difference between the equity you will release on the sale of your current property (sale price, less current mortgage to pay off) and the price you are paying for your new property. Don't worry about shortfalls in deposits as these get sorted out by the respective solicitors. (I think they use some kind of "bond" or "promise" to get around the fact that you don't have the equity from your current property to fund the deposit on the new one, until your current property sale completes).

You really should discuss this with your solicitor - they will give you the best comfort. But if you are definitely committed to buying the new property, then get everything lined up - especially that survey!

Re valuation for NHBC property - you are right. You still need a valuation. The guarantee does not give any idea of the value of the house, which could be more, or less, than you paid for the new-build. And yes, it could be less. With a new build, you pay for brand new carpets, curtains, appliances etc .. these are not recognised in the sale price at 100% i.e. you paid 100% for new, but you won't get 100% recognised in the selling price. No worries if the actual value of the property (excluding these things) has increased though.

HTH

dougk_2

Debt_Free_Chick wrote:

Are you committed to buying your new property? If yes, and it's then simply a matter of selling your own house, then there's no reason why you shouldn't line everything else up now. So go ahead and get the survey done. Personally, I would not delay this. You don't know anything about the property (other than what you've seen) without this. What if it reveals expensive remedial work? Would you still buy? Would you want a price reduction? You don't want to be considering these things late in the day. Get the survey now.

Once you have lined up everything for your new purchase, the only thing holding you up is selling your own property. Once the buyers commit, you are "ready to push the button" as everything is in place with the property you are buying.

You don't "lose" the survey if your buyer pulls out. The survey on your new house is for you to decide that you want to buy it, in the condition that the survey reveals, at the price you've offered. If your buyer pulls out, then it doesn't matter. You don't need another survey on your new property.

I have to disagree with DFC over this point. It matters a great deal if your house sale falls through!

Having had two buyers pull out on the purchase of our property since september last year and having lost the 2 properties we had offered on because the sellers were not prepared to wait until we found a buyer I would now not arrange for a survey, searches etc until the purchaser of our property has had a) their mortgage approved b) a survey carried out and ideally c) an exchange date set.

IMHO you are better causing a delay and being sure your property is sold before commiting vast sums of money on a house you wish to buy. Surveys are not cheap (circa £500 for a homebuyer report) + searches and some legal costs... realistically its about £750 and if your house sale falls through you are at risk of losing the house you are buying (most sellers want to sell their house quickly so if you havemn't sold then your a problem!). You then have to pay this sum again for the next house you wish to buy and so on.....

At present there seem to be large numbers of house sales falling through so don't commit until much of this risk is gone. By all means start the mortgage process off so you know you can get the money needed but don't attach it to any particular house.

MY advice would be to get your estate agent to put pressure on the buyers, and to keep chasing them for updates.... give them a dealine for survey and provisional exchange dates and keep accepting viewings on the house so you can find backup buyers.

Debt_Free_Chick

Doug - I agree with what you say, if Shrimpers has to pull out of purchase of her new property.

But it looks like everything has been done bar the survey. Surely she needs the survey now, if only to determine that she is going ahead with the purchase. It could reveal information that leads her to change her mind. Surely, she needs that information now as she may want to back out?

Also agree that she should have sold first. But given where she is (We are where we are), surely she has to make a decision about going ahead with buying the new property .... and the sooner she does that, the better ...?

Shrimp_Stu

Thanks for the pointers.

The situation on my new property is - we have not committed to the purchase, although we really like the house and unless anything was reported from the survey was major then we wouldnt pull out.
Our mortgage is with our existing lender and we just need some additional funding for the new property, which has been agreed on condition of the homebuyer survey.
Our seller will put the house back on the market if our sale falls through, so we dont want to run the risk of losing the house.
I thought that with an offer on our house we could proceed with making an offer on a new property which we have done.
I suppose the only way we can hurry things along is to put pressure on our buyer, what is a responsible timeline for a survey from our buyer to do ?
Thanks
Stuart
(SJ)

dougk_2

A mortgage in principle and survey can be carried out within 14 days.... So I would give them 14 days for a survey date to be arranged.

However I expect your buyers are thinking the same as you now as they have to be sure their property is sold before spending too much money themsleves on something that may fall through!

Its the problem with the whole current system really.... there must be a better way!