Buying from a family member

IainBeale

I think we will put our house up for sale a lot sooner than planned and complete work once both agreements have been met. I'm guessing a mortgage and sale could take up to 4-6 month anyway

DaftyDuck

Well, there is one option open, given this may be a "friendly" transaction, and that'd be doing the work between exchange and completion - which could be a couple of months apart.

It does seem like you need to simplify the process, and clear up your plans . You will need to sell your house to buy theirs (or you'll have two mortgages, stamp duty implications, two sets of Council Tax and utility bills...). You'll need to agree a price. If this is below market value, there may well be gift implications for the mortgage lender to consider.

I'd spend an hour thinking on your plans, and repost, possibly in bullet-point fashion!

Mojisola

AdrianC wrote: »

It's very kind of you to spend six months renovating your relative's house, on the promise of a sale.

If this is really what is intended, sign a legal agreement with the relative saying that you will be reimbursed for all the money spent on the house if the sale doesn't go through. Obviously, both parties would have to agree on the work and costings.

Also, plan for 'what ifs' to happen during the renovation period - the relative dying, you losing income, etc.

AdrianC

Mojisola wrote: »

If this is really what is intended, sign a legal agreement with the relative saying that you will be reimbursed for all the money spent on the house if the sale doesn't go through. Obviously, both parties would have to agree on the work and costings.

There are also potential repercussions if the quality of the work is deemed unacceptable. A quagmire in the making...

And what happens if, after the six months, the OP isn't in a position to buy? Perhaps the mortgage market's tanked again. Perhaps, perhaps, perhaps.

G_M

Iain, I'm afraid there is only one thing you've said so far that I've fully undertood and agreed with:

I guess I'm not coming across too clear on here.

If you want further help, I suggest you start again, and explain in simple terms (perhaps bullet points?):

* exactly what your current situation is (mortgage, savings etc)
* what the current market value of the other property is
* what you wish to do to it, and at what cost
* what your relative wants
* what sequence of events you plan, in order to achieve your objective

AnotherJoe

IainBeale wrote: »

I think we will put our house up for sale a lot sooner than planned and complete work once both agreements have been met. I'm guessing a mortgage and sale could take up to 4-6 month anyway

If you mean by that, you'll start work between exchange and completion, and that the seller is happy for you to do that, you'll have to get some legal agreements run up. Generally you'd expect 2-4 weeks between the two, you are looking at 6 months. Your buyers may not be happy with this, to put it mildly. If you mean, start work once someone puts an offer in on your house but before you exchange on it, this is what you are getting




So not sure I see that as a starter either.

Can you not just do a normal sale/buy, mostly live in the granny annex whilst the house is being done up (or the messy stuff at least) them move back into house and do granny annex?

AdrianC

You'd not normally get a firm mortgage offer to stand for six months, either, and you'd be VERY ill advised to exchange without knowing 110% that the funds will be available to complete.

mlz1413

I'm with Dafy Duck just build in a period of time between exchange and completion that you are allowed in to change the kitchen and paint the walls, approx 2-4 weeks. Although it will depend on your buyer accepting this delay!

Doing up a house you don't own is a risk, if you want to do this you could do it now before you market your house, get mortgage advise etc

The normal thing that happens when someone does up someone else's house is that they are paid for the work carried out. You could look at this option and then if you don't buy the house you are not out of pocket.

IainBeale

Thanks again this seems like a reasonable idea

"Can you not just do a normal sale/buy, mostly live in the granny annex whilst the house is being done up (or the messy stuff at least) them move back into house and do granny annex?"

I think we will do this but put the kitchen and patio doors in the month or so between exchange . I suppose everything else can be lived with temporary. At least we have free access to the property for measuring and getting quotes in the mean time.

I'm still not sure about this gifted equity. Does anyone have any experience of this? How does it work as a negative? Will it stop me getting a mortgage?

AnotherJoe

I think it's a red herring myself. Sounds like it needs a lot of work so fair enough theres a reduction in recognition of that.