Seller pulled out a week before exchange & completion as lender has withdrawn offer

RB1784

I was due to exchange and complete next Friday, the seller called me on Friday to say they could no longer go ahead with the sale as their mortgage offer had been turned down. I have now lost about £2,000 (I am 26 and single and have been saving since I started work at 17 so it will take me ages to save this again).

I have two questions -

1. Why would the lender pull out at such a late stage unless she had lied about something?

2. Can I recover any of my convayancing costs (especially if she has lied)?

I was buying a share in a shared ownership property and there were issues at the beginning because the seller had used 100% profits in her calculations instead of the 50% she was entitled to from her share. She then struggled to find a new mortgage during which time I asked my solicitor to stop work. The seller advised me that she had found a new mortgage and we could continue (this was beginning of July) so I instructed my solicitor to carry on work. I even spoke to the seller last Monday and she confirmed her solicitor had completed all work and there were no problems her end so this has come as a huge shock to me.

I'm wondering if she ever had a mortgage in place and if she didn't and has led me on is there anything I can do about it?

Any help would be greatly appreciated!

hcb42

I am assuming you are in England

There is no contract until exchange, so there wont be any come back on her I am afraid.

Why £2K loss? Is all that due?

RB1784

Hi, yes I am in England. I have searched and everything seems to be saying that there is nothing I can do. These are the convayancing costs I have to pay as all the work has been done.

It seems so unfair that we should be able to proceed this far if she either had no mortgage offer or she lied in order to get the offer.

JingleJangle

The problem is that the work your solicitor has done has nothing to do with her onward purchase, it is on the purchase of her property. There is no comeback, as she is not legally required to have a mortgage in place for an onward purchase to sell her house to you.

hcb42

have you asked the solicitor for the bill? Seems high, just for the sol, that is all. Obviously survey money is lost.

It is the risk, unfortunately, some people dont always play a straight game. Happened to me years ago, my buyer pulled out as no mortgage, and I lost the house I wanted, and the whole chain fell down.

RB1784

That was the quote including searches, mortgage and lease costs - shared ownership costs are higher than normal as there is more work involved and you pay rent on the part you don't own. They are sending the bill next week but as all the work had been done I am assuming I will get hit with the whole lot.

jimjames

That does sound very high. My costs are estimated to be around £2400 which includes £1350 stamp duty and would be lower if the sale aborted.

RB1784

That was the lowest quote I got...and there is no stamp duty...maybe they won't charge me the full amount as the sale hasn't completed?

Yorkie1

I think it is a long assumption that the seller lied. Shared ownership is often said on here to be trickier than a standard transaction. Their underwriters may simply have taken a closer look - this happens, without the seller being at all to blame.

Sorry for your disappointment. It is always open to the seller to continue with the sale to you and move into rented, if it took them a long time to find you as a buyer and they still want / need to move.

RB1784

I would hope she didn't lie, she seemed like a nice person! I didn't realised the lender could/would pull out after the mortgage offer was in place? She is no longer moving as the person she was buying from need to move and has to find a new buyer quickly - she was moving into the 2 bed above her place.

Yorkie1

Yes, the lender can pull out any time up to completion (i.e. even after exchange).