Offer made on house for less than mortgage

Idiophreak

TBagpuss wrote: »

The mortgage lender won't release their charge over the property unless you pay back the mortgage in full.

Exactly...the lender's going to have to be satisfied that they're getting their money back...so _Andy_'s assertion that they don't care where the money's coming from isn't quite right...they do care - they want to make sure it exists!

_Andy_

Yes, so what would happen is the OP gives the solicitor the money on sale, which is used to pay off the mortgage. They won't redeem the charge until that goes through. hardly rocket science.

Valencia

Thanks for all your comments folks. Hubby and I are still deciding whether it is something we want to go ahead with or continue renting out the house until a more reasonable offer is made.

MissMoneypenny

How are you going to sell the property if you have a tenant it it? You can't guarantee vacant possession. The tenant may be in contract when you eventually find another buyer or they may refuse to move out when you need to exchange contracts. A section 21 is only a notice to quit they don't have to move out on the date you want. It could take months to remove them through the courts or cost you a backhander. If the section 21 isn't served correctly, then it will take even longer.

Most buyers know this, so perhaps that is the reason (or another reason?) people don't want to buy it?

Idiophreak

MissMoneypenny wrote: »

Perhaps the fact you have a tenant, is the reason (or another reason) people don't want to buy it?

It certainly won't help...there's a house I was looking at the other day that's probably on for £50k less than it would be with vacant possession. Nobody wants the hassle or could get a mortgage on the thing anyway. Why they don't just give the tenants notice is beyond me...

(yes, I know it's not a nice thing to do etc, but that's life)

Valencia

MissMoneypenny wrote: »

How are you going to sell the property if you have a tenant it it? You can't guarantee vacant possession. The tenant may be in contract when you eventually find another buyer or they may refuse to move out when you need to exchange contracts. A section 21 is only a notice to quit they don't have to move out on the date you want. It could take months to remove them through the courts or cost you a backhander. If the section 21 isn't served correctly, then it will take even longer.

Most buyers know this, so perhaps that is the reason (or another reason?) people don't want to buy it?

My tenants have been there for around 4 years and we only have to give one months notice on either side now.

The benefits of having an empty, clean house, free from clutter is quite a pull when selling a house as most potential buyers often can't look past the people living there to see the potential.

martinsurrey

Valencia wrote: »

My tenants have been there for around 4 years and we only have to give one months notice on either side now.

The benefits of having an empty, clean house, free from clutter is quite a pull when selling a house as most potential buyers often can't look past the people living there to see the potential.

*Amateur Land lord alarm - WOO WOO WOO WOO*

You have to give 2 months by law (house in england?), and thats just to start the process to get possession,which can take 2-3 month longer through the courts…

angelsmomma

Valencia wrote: »

My tenants have been there for around 4 years and we only have to give one months notice on either side now.

The benefits of having an empty, clean house, free from clutter is quite a pull when selling a house as most potential buyers often can't look past the people living there to see the potential.

You have to give 2 months notice not one. They don't have to leave and if they want a council house they will be told to stay until and eviction order is obtained.

Cross posted with martinsurry (I am such a slow typist)

Valencia

angelsmomma wrote: »

You have to give 2 months notice not one. They don't have to leave and if they want a council house they will be told to stay until and eviction order is obtained.

Cross posted with martinsurry (I am such a slow typist)

Sorry just reviewed the tenancy agreement it does say 2 months. For some reason I always assume one. Thanks for the reminder.

Hmm interesting.

So on that basis it would be better to get rid of tenants and then put the house up for sale?

Don't know whether from a financial perspective we could sit with an empty house while we sell. But on the other hand it could potentially sell quicker?

Need to really think about this - as we want to sell the house, we just want to go about it the right way.

StuC75

How much of a shortfall is this? within what percentage of the asking price...

If only a couple of £k, then the risk of vacated property and covering the full mortgage until it is sold for asking could prove more costly than taking what is offered now and give the notice to tenants (with sufficient enticement for them to leave to your terms)..

Speak to the people involved to see what works best..