Chain Broken Last Min - Options?

Roland_Flagg

Our buyer's buyer (a cash buyer) pulled out just before the exchange of contracts. Our buyer have now put their house back on the market, and their EA is going threw all the previous viewers and there maybe interest.

Our sellers are an older couple who will be moving in with their daughter. They are not fussed about the delay as they were behind on clearing out/packing up.

We can potentially buy without selling, but wouldn't want two properties for more than four months or so. We could probably complete with our sellers first week in December now, even if we haven't sold.

Lots of options going threw my head: Give our buyers time to sell again? Put ours back on the market? Ask our buyers for a non-refundable deposit (say 10%) and we will give them say 9 months to complete? See if our buyers want to rent ours after we move, then buy ours when they sell their house.

I'm not sure which of these options are viable. Our buyers are lovely people and we want them to have our home, but business is business.

Opinions?

PasturesNew

It has to go back on the market. Be clear with your buyers that you have to do that - and that they still have "first dibs" if they can sell theirs quickly ... but, as you say, business is business.

I had a house with an offer on it, but the offer was from buyers who hadn't sold theirs, so I "sold" it to another guy, who pulled out at the last minute - by then the original buyers were in a position to buy my house, so they ended up buying it.

In another one, my buyer's buyer lost their jobs, so I put it back on the market and found another buyer. The day we exchanged, the original buyer came back to say he'd now got a new buyer, so could proceed, but he was too late.

spadoosh

It seems like your sellers are happy to wait. Why complicate things.

I dont think your buyer would agree to a 10% non refundable deposit. Theres no guarantees about them selling theirs and they would be daft to risk losing that money (if they cant afford too, even if they can it would be daft imo).

Your happy to wait, your seller (top of chain) is happy to wait. If your buyer will wait thers not much to worry about.

I too think its risky owning two houses if you cant afford them longer term. Its a good way to end up with no houses.

Sympathies for the breakdown but i'd say the prudent approach would be to wait.

Surrey_EA

Roland_Flagg wrote: »

We can potentially buy without selling, but wouldn't want two properties for more than four months or so. We could probably complete with our sellers first week in December now, even if we haven't sold.

Don't forget that you'll then be liable for on additional 3% stamp duty, on the property you are purchasing.

Roland_Flagg wrote: »

Lots of options going threw my head: Give our buyers time to sell again? Put ours back on the market?

This would increase the chances of the chain coming back together, as it gives you the opportunity to find a new buyer, as well as the opportunity for your buyers to find a new buyer, see which happens first.

Roland_Flagg wrote: »

Ask our buyers for a non-refundable deposit (say 10%) and we will give them say 9 months to complete?

Effectively asking them to exchange contracts, without having sold their current home. Unlikely anyone would go for this, as that's probably a lot of money to risk losing.

Roland_Flagg wrote: »

See if our buyers want to rent ours after we move, then buy ours when they sell their house.

Are your buyers in a position where they can pay rent, whilst also covering their financial commitments on the property they currently own? Does your property currently have a mortgage on it? If so do the terms of your mortgage allow you to let the property out?

Roland_Flagg wrote: »

I'm not sure which of these options are viable. Our buyers are lovely people and we want them to have our home, but business is business.

Opinions?

It sounds as though the vendors you're hoping to buy from are relatively relaxed, so hopefully either your buyers find a new buyer, or you find an alternative buyer, before your vendors start getting impatient.

hazyjo

Can you afford the initial extra 3% when buying a second property? (Refundable)


Why would your buyers agree to a 10% refundable deposit? That happens at exchange when everything is finalised - not before. They'd be mad to agree.


Lots of reasons why you shouldn't rent your house to your buyers. Basically, you would have full LL's responsibilities and if you have a mortgage, would need permission to change it to CTL or change to BTL. It takes months to evict if it ever came to that, and they'd prob have 6 months' security before you could start. Other reasons (deposits, etc) but I think this is enough to explain why not a good idea.


Get it back on the market at a reasonable price and hope you get a buyer quickly so the chain can reform (or find another house to buy).

Roland_Flagg

Thanks for the replies. Yes we can cover the refundable stamp duty.
And as we have just come out of a fixed rate mortgage and have no penalty, we could pay our existing mortgage off (about £80k) so we wouldn't have two mortgages.

saajan_12

Roland_Flagg wrote: »

We can potentially buy without selling, but wouldn't want two properties for more than four months or so. - you'd be liable for 3% extra stamp duty which you'd get back when your sale goes through.. can you afford this? Also you'd probably borrow more until you get the equity from the sale, so likely a higher interest rate. Also, you'd need a flexible mortgage that allows you to pay off a chunk in a few months. We could probably complete with our sellers first week in December now, even if we haven't sold.

Lots of options going threw my head: Give our buyers time to sell again? - yes in first instance, see how long it takes and ask for more confirmation it's a viable sale early on
Put ours back on the market? - yes, can do this while allowing your existing buyer to come back if they manage to sell.
Ask our buyers for a non-refundable deposit (say 10%) and we will give them say 9 months to complete? - I can't imagine they'd agree, that's like exchanging before they have a complete chain.
See if our buyers want to rent ours after we move, then buy ours when they sell their house. - unnecessary complications, you'd become a LL with the repair, gas safety, depsit protection etc responsibilities that come with it, plus need Consent to Let or a BTL mortgage.

I would work with your buyers to see if they get a new buyer in the next week or two. If not, I'd put it back on the market, keeping your current buyers in the loop in case they do find a buyer before you do.

If your sellers aren't in a rush, why are you - do you really need to move in a certain time frame? If you do, you can buy now and follow the same as above re putting your house on the market but this will be more hassle and/or more expensive re stamp duty and mortgage rates.

Natbag

How long did it take your buyers to get an offer on their property the first time round?
This happened to us, our buyers pulled out but as we had sold our house within two days the first tie our vendors gave us a two-week period of grace to find another buyer. It took a bit longer than the two days the second time, and required a small drop in price (which our vendors met us half way with) but we just made the deadline.

Rambosmum

I would put it back on the market, but advise your current buyers that if they sell quickly then it's theirs.


Quickest and simplest option. The others are fraught with pitfalls.

Roland_Flagg

Natbag wrote: »

How long did it take your buyers to get an offer on their property the first time round?
This happened to us, our buyers pulled out but as we had sold our house within two days the first tie our vendors gave us a two-week period of grace to find another buyer. It took a bit longer than the two days the second time, and required a small drop in price (which our vendors met us half way with) but we just made the deadline.

Not sure. But it's a decent market where I live, but you have to price it well, which I'm lead to believe they have (as did we).
We will just see what happens. At least our sellers are very relaxed.
Thanks to all again.