Options after change of circumstance buying a 2nd home

leg_end666

Wow, such a confusing world! Much appreciated for any help and advice on the matter.

Basically me and my partner had decided that it was time to find a bigger home,so we put our house on the market and planned to move in with my parents if it sold so that we weren't in a chain. We started to view houses however I was pretty set that I would prefer to sell and then assess the situation.

A month went by and a property came on the market that was ideal, this is where my mum approached me and said that if it was what we wanted, she'd purchase it for us cash, as not to miss out. Viewed it, it's perfect, ended up agreeing on the asking price 135k. The house has only just gone on the market and the owners of it haven't found a property, they also have a child and it is close to Christmas so we pointed out that we didn't need to move straight in and would be happy to give them time to find a property rather than turf them out.

4 days later we had a viewing on our property and the next day received a bid and agreed on a price from a cash buyer.

Having not planned the original deal with my mum we hadn't looked at the implications or are yet to receive advice on how we were going to sort the original transaction between us once she had bought it. So now with the change of circumstance we are thinking that it'll be a lot better for us financially if we get a mortgage sorted and us buy it directly.

So basically at this point we have a mortgage advisor appointment booked for Tuesday and a second viewing also booked that afternoon, where we are going to discuss it with the current sellers. I can't see a problem in us getting a mortgage 25k equity from house, 45k combined income, house is worth 135k, with financial backup from mum IF required, the only difference I can see is a couple of extra weeks organising mortgage over cash, would that be right?

If they don't agree and insist on our first agreement, what is the most cost effective way of sorting it between me and my mum? Will it be stamp duty on both transactions etc? Any other options? stuff like renting from them or in effect paying them 25k and then payments?

Basically as you can probably tell, knowledge is pretty low so unsure what the worst case scenario is and can only assume that the best case scenario is that they agree to us sorting a mortgage out after our sale has gone through?

Thanks for your time.

lincroft1710

As your vendors haven't found a place, they are in no hurry to move. All any vendor wants is his/her money, as long as it's legal the majority won't care if it's from a relative or bank/building society. Because even if your sale falls through, your mum can still provide the deposit.

If your mum buys and sells to you both you and her each have to pay stamp duty and solicitor's fees.

Errata

1) You can't 'turf them out'
2) If they agree to renting it to you, you're buying from idiots.
3) What's to stop them hanging on to your £25k until you manage to get it back because you decide after 'renting' for two weeks you don't like the property
4) A cash sale can take as long to process as one with a mortgage.

leg_end666

lincroft1710 wrote: »

As your vendors haven't found a place, they are in no hurry to move. All any vendor wants is his/her money, as long as it's legal the majority won't care if it's from a relative or bank/building society. Because even if your sale falls through, your mum can still provide the deposit.

If your mum buys and sells to you both you and her each have to pay stamp duty and solicitor's fees.

Thanks so confirms what I was thinking, hopefully they will go for it and that will be the end of the worrying.

leg_end666

Errata wrote: »

1) You can't 'turf them out'
2) If they agree to renting it to you, you're buying from idiots.
3) What's to stop them hanging on to your £25k until you manage to get it back because you decide after 'renting' for two weeks you don't like the property
4) A cash sale can take as long to process as one with a mortgage.

You've got mixed up with 2 and 3, i was on about any possiblity of renting off my mum, or in effect paying her 25k and then the rest in installments? I imagine there will be allsorts of issues with that though!
4, is good to know, basically then its all on if the vendor of the one we want to move into agrees it seems, but really its not a massive difference. I think I was starting to feel uneasy about it as though they might feel tricked!

enthusiasticsaver

If the vendors haven't found a place yet then surely you can just go ahead with the cash sale on yours, get a mortgage offer in place and then move in with your parents as originally planned until they ready to go ahead. It doesn't take that long to arrange a mortgage so I can't imagine your vendors are going to have an issue with that. They are obviously not in a rush. The only issue is whether your vendors are serious about moving and you are not going to end up putting your stuff in storage and living with parents for a long time. You can't turf them out as it is not your house yet. I would be reluctant to incur a lot of charges yet though until your vendors have found a place so it may not be a good idea to start instructing solicitors, surveyors etc until you know it is actually going ahead, just concentrate on your sale.

leg_end666

Makes perfect sense, thanks. Good to have a bit of confirmation and good advice with the costs. We are viewing it today and going to speak to them, so will investigate their house hunting, also our buyer is having a second viewing today.

Hedgehog99

This is just a guess, so please, other posters correct me if I'm wrong, but, wait and see how long it takes the sellers to find their next place. If this is before you sell yours, could your Mum pay the money to you so that you then buy the house in your name, then pay your Mum back as soon as you sell your house? Are loans of such a hopefully short duration between family members allowed and free of tax implications? ...and the dreaded seven year rule would not be a problem? And nobody gains financially out of it (as in your Mum would get all her money back)?

leg_end666

Luckily it's all sorted, the seller didn't bat an eyelid! they've also found a property which they've had an offer accepted and are all set to move after January all being well!