Delayed exchange due to negative equity?

laura_louise

I'm buying a house which was due to exchange last week and it didn't happen due to the other side missing a mortgage redemption statement.

I found out this morning that the seller is in negative equity whih is causing the delay.

Can the sale fall through due to this? Can anyone tell me what happens in this case? Does the sellers mortgage company have to agree to the sale? Any advice on the process?

Dan-Dan

Either they need to have the funds available elsewhere that they are using to make up the shortfall , or the lender has agreed to turn the difference into an unsecured loan , or something similar
In any event you need to be all over your solicitor for answers

laura_louise

Just spoke to the solicitor... We don't know that the other side has funds to make up the shortfall!! Can't believe they didn't tell me til now!

AdrianC

What did they answer on the Property Information Form?

Thrugelmir

laura_louise wrote: »

Can't believe they didn't tell me til now!

Perhaps they've been attempting to resolve the issue. Politely put it's not your concern. Though obviously it impacts you.

bargainhunterss

laura_louise wrote: »

Just spoke to the solicitor... We don't know that the other side has funds to make up the shortfall!! Can't believe they didn't tell me til now!

Hi laura_louise, so sorry to hear you're going through this. We had the same problem earlier in the year, but luckily for us the vendor's relatives stumped up the cash to pay the deficit. I think we would have pulled out if not (our house wasn't worth the amount they needed.)

I suppose it's just a case of how long you are willing to wait for them to sort themselves out, and whether or not they can sort a deal out with their mortgage company (or whoever else). Whatever happens, don't feel pressurized to pay the difference (why should you sort out their debts????) I suppose it all depends on how much you 'love' the house

Good luck!!!!

bargainhunterss

Thrugelmir wrote: »

Perhaps they've been attempting to resolve the issue. Politely put it's not your concern. Though obviously it impacts you.

They should still keep her informed..... However, your solicitor (and maybe their solicitor) didn't know until they put the offer to the mortgage company to see if it would pay off their debt...

laura_louise

I really love the house... So hanging in and waiting. My solicitor is going to put some pressure on to find out the full situation and how long it might take. My mortgage funds are going back to the lender in the meantime. Sorry to read I'm not the only one this has happened to thanks everyone for your replies.

laura_louise

Update:

Spoke to the sellers estate agent this morning (who has been fabulous, i have to add... ).

I told him i need to know the situation and if the seller is going to be in a position to move forward or not.

At that point i found out that the negative equity is only a few hundred pounds.... HUGE relief! The problem only came to light recently, apparently he knew it was going to be tight but thought the sale price would just about cover it, and it turns out that it doesn't.

So, panic is over, i think.

I suppose this is what happens when you get a house 'cheap' from someone desperate to sell!

justcat

Glad to hear that it isn't thousands. Hopefully that will be sorted soon.

JimmyTheWig

If it was just hundreds then I'm guessing that it is due to the timing of the proposed completion. Earlier in the month and the interest wouldn't have built up. Later on and the next mortgage payment would have reduced things.