What are the risks?

freeman3030

Hi all, (apologies in advance for the long post!)
I'm wide awake and can't sleep because I've got so any questions buzzing around my mind after having a positive valuation yesterday. We were first time buyers 2 years ago and our 2 year fix is almost up, we've seen our MA and were switching lenders from nationwide to natwest. We bought our flat for 91.5k, we've done a bit of work and what with the market having risen in our area, looking at comparable places and looking on zoopla we thought 115k is a realistic value. The valuation man came yesterday and he was surprised why we said it was worth 115k as he would value it at atleast 10k more! I nearly fell over!
We've been thinking about moving because we really want a house, we want to be closer to work etc. why with this positive info it's really pushed me into looking at property. I know it's only worth what someone is prepared to pay, but even at 115k, with the mortgage outstanding now just under 80k, we've got a good 35k to put into the next property and obviously more if someone is prepared to pay more.
It's now bought my attention to the buying and selling process and how much it scares me. It just seems like it's going to be really difficult, finding a buyer - finding our next home - getting an offer accepted - solicitors - searches... All within a decent timeframe in which your buyers might pull out because of the length of time it all takes.
So what would the risks be if we sold our flat, move back into my mum and dads (we're fortunate that my parents are very accommodating and would really help us out like that - and mum would happily cook dinner every night because she's the best!)
While we find our next property? Are we then classed as first time buyers again as we're chain free so to speak?
It just seems like a far easier way of doing things because then your not scrambling to find your next home just to keep your current buyers happy. I'd rather take the time and buy something we want rather than be pressured into buying a house just as to not loose our buyers. Ah there's so much to think about!
If anyone can shed any light on the risks it would be much appreciated.
Thanks

Davesnave

The only large risk, apart from maybe finding you don't get on so well with your parents as semi-permanent residents, is that you'll take too long by being picky and prices will move ahead while you're off the ladder.

There may be mortgage deal implications too, but I have no knowledge of those. You would not be classed as FTBs.

Also, where would you store all your possessions? Renting storage is feasible, just not cheap if you have a fair amount of furniture you want to keep.

Having no chain would put you at a distinct advantage in negotiations, so people certainly do this. I did it through renting, but I was aware after 6 months or so that the tide of falling prices was about to turn. I would have been much more twitchy had they been rising then, as it sounds like prices are where you live.

martin.cat

It's all doable
Don't forget you will need say £5-7k for fees estate agent £2-3k Solicitors £1.5 for buying and selling including searches land registry etc survey /mortgage fees
First thing is to sort your finances and see what mortgage you can comfortably afford. Then check out property and see if you want to do it
If you decide to move get at 3 EAs around and see how knowable they are and obviously compare cost. Best isn't necessarily dearest but don't just go for cheapest.
If and when you get an offer you can decide the what suits. It maybe you are lucky and find a property that you want
We were lucky sold ours in 3 days for full asking price then view several. The house we purchased came on market 6 months before ours and I liked it but thought it was out of our price range but after getting good price for house we were in strong position and got an offer accepted for £15k less than asking price. He was happy to move out into rented accommodation so our chain was simple with Ftbs so we moved about 10 weeks later just had a issue with deeds that slowed up solicitors

freeman3030

Thanks for the replies. I know I can live with my parents, we've got a fantastic relationship. As for storage, my nan has large sheds which I can always store furniture in and my other nan has an unused lounge that I can use. My family are so good and I know really won't mind helping us. Rising house prices is a concern, I doubt it would take us forever to find a house we want to buy but I don't want to be pressured to buy a house for the sake of keeping our buyers. Also thanks for the info, I hadn't thought about the advantage of being chain free and what advantages that brings!
Fortunately my sister in law is our mortgage advisor so we've spoken about what we can and can't afford. I don't like having to keep asking her questions though as I feel like a pest! I can see it being a really stressful time! Thanks for the info guys!! Xx

ellie27

I think its a great idea and your are lucky you are in the positino to be able to do that.

This is partly the reason why we are currently renting. Our house is SSTCM now. We accepted an offer of full asking price within 3 weeks of marketing it, buyers mortgage fell through 7 weeks later when we were ready to go onwards with our purchase so it was all back to the start again.

Accepted another offer and buyers mortgage fell through again.

There was nothing on the market at that time so we had not offered on anything else. When the first sale fell through we looked back and decided we were not really in love with the house we were buying.

We moved into rented accommodation 4 months ago, our house is now SSTCM, missives are being signed next week with our buyers hoping to move in 2 weeks from now. We have now found a house we absolutely love and should be moving into it mid-June!

I assume you have had your eye on the market for the last at least 6 months or so and have a good idea what you want, what budget you have and what prices are like. Do view anything that ticks the boxes on paper, even if the photos dont look great as sometimes the pics do not do the houses justice. The house we are buying looks ok on paper but there are some rooms that there are not even pics of! Good luck and keep us posted!

charlamine

We are doing the same thing, but not moving in with parents but renting in the meantime.

It gave us good position to negotiate with our buyer who is an investor who wants to get in quick, and if he pulls out or try's any tricks to lower price at the last minute due to exchange we won't be pressured to accept a lower offer because of money spent out as we won't have fallen in love with our forever home and paid solicitor fees and survey fees, we will just shrug our shoulders and put it back on market.

We are looking to purchase a new build for our next home so renting in the meantime will mean that we have the ready funds to reserve and exchange within the 28 day window without hassle. We are going to look at reserving within 3/4 months of renting so that we don't get stung by house price rises.

The only stumbling block I forsee is potentially not getting a morgage as I know it can be ultra tough these days and we are in a very differnt position then we last obtained a morgage, we have a little girl, so our outgoings are increased with childcare etc. but what we are doing is putting an extra 10k money aside more then we currently would need for a deposit so that if we can't move right away we have a house price rises buffer so to speak. We are also using our equity to pay off some debts so will be able to save a lot more per month as well which will look better in affordability terms

sh856531

> £5-7k for fees estate

You can knock that on the head - put your property on Emoov for £600 quid. Job done. Have done this recently and they have been fantastic so far

They have a 94% customer approval rating. Your local estate agent almost certainly doesn't ;-)

http://www.feefo.com/GB/en/reviews/eMoov/?id=1186513&mode=service&froms=50

Hoploz

Just settle down and have a look at what you could buy.

Make an appointment with your mortgage advisor if you're concerned about taking up her free time. You wouldn't be wasting her time as you are genuinely considering taking out a mortgage which would presumably earn her a commission just as any other customer would.

Have 3 agents round to value your flat for a realistic sale price. They will show you similar properties they've sold for comparison. My conversation with a surveyor recently advised me that agents asking prices can be significantly higher than a surveyors valuation. This is because the agent is ahead of the market and the surveyor is lagging behind it. The deals are agreed first then the surveyor comes along afterwards, which can make a difference in a rising market.

Then have a little look online and see what you could afford with the advice given. If it seems feasible that you could get what you want, then sign up with all the estate agents as a potential buyer.

It is difficult to time everything right with a sale and a purchase together, but it happens all the time, and if you're only looking for a standard house rather than one thing specific then houses may well be in regular supply so if one sells before you or falls through when you try to buy you can probably find another.

Hoploz

BTW fees to sell should only be around 1.5% (+ VAT) on the high street so clearly 5-7k is nowhere near!