Buying a house where price does not cover sellers debt

kimvincent2604

Hi,

Myself and my boyfriend are buying a house from a divorced couple. On the particulars form, it states that the price we are paying for the house, will not cover the money the sellers owe.

What does this mean for us?

Many Thanks
Kim

sheff6107

I'd get your solicitor to find out how they are making up the shortfall.

davidmcn

Either they have other funds for the shortfall, or they get lender to agree that they can pay the net proceeds to discharge the mortgage (and possibly keep the remainder as an unsecured debt).

Presumably they're confident of sorting it otherwise they wouldn't be wasting their time selling, but your solicitor will ask the question.

G_M

If there is a Charge (mortgage, debt) on the property, this must be removed when you buy.

That means either

* they top up the money you pay them from ther savings (or elsewhere), to pay off the debt and remove the Charge, or
* they get the mortgage lender to agree to remove the Charge, and move their outstanding debt to an unsecured one (ie not secured on the property)

The alternative is that the Charge remains registered against your property - which you do NOT want!

Cakeguts

It means a delay in the buying process. The house could have several charges on it which means that you will have to wait until all of them are removed. Ask your solicitor to give you an idea of how long it will take to sort this out.

stator

It means possibly delays and complication.

If you feel like you are in a strong bargaining position you could ask that they lodge the shortfall funds with their solicitor before you start spending money on surveys etc. However if they feel like they can find another buyer easily they will tell you to get lost.