Private purchases and cash deposits

Iro1982

Wondering if anybody can help. Our house is on the market but not sold yet. We have done the wrong thing and have found the house that we want to buy but obviously not in a position to make a firm offer. The purchase is likely to be private purchase without agents as we know the people selling and have been to view without any interaction with the agents. We were thinking about offering a cash deposit in advance to secure the house until ours is sold. Just wondering if anybody has done this before, any legal or mortgage issues resulting from this etc etc. We would obviously go through the convincing solicitor so that it is all documented and accounted for

da_rule

There is nothing in theory to stop you exchanging contracts on your purchase before your sale.

However, the problem will be how long the seller is prepared to wait.

hazyjo

They'll still need to check their contract with the EA - even if they didn't introduce you.


Did you hear about the house for sale from the horse's mouth so to speak, or did you notice a board?


I would never exchange on a purchase before selling unless you have the cash to do so (without selling) and can afford the temporary 3% stamp duty too.


Wouldn't offer a cash deposit. Gets very messy. Way too many 'what ifs'. If you lose your job? Have to move to be near family? Can't sell? Get turned down for mortgage (if you need one. Might get an offer now, but it's likely to expire within 6 months)? Vendors will be kicking themselves if you're still hanging on in several months' time when they could have prob sold in that time. Plus, where are they going? Can't see anyone above hanging on. Who knows how long the chain might be. Not like you're guaranteed to sell to FTBs. Lots more reasons...


Just price to sell and see if they'll give you say 4 weeks' grace to get a buyer and take it off the market temporarily.

davidmcn

What are the terms on which this deposit would be made? You'd effectively have to negotiate a pre-contract contract.

Comms69

I don't understand the logic here. You cant guarantee you'll sell with-in a specific timeframe; so why risk what is likely a substantial deposit on a gamble.


Whether it's marketed by an EA or not is largely irrelevant to something like this.

kingstreet

Presumably you have a mortgage and you need a mortgage?

Your lender will only allow you to complete on the purchase before the sale if you prove you can afford both, according to the lender's affordability calculations.

You'll also need the deposit (purchase price minus new mortgage amount, not an amount which secures you the new one while you sell the old one) which would presumably be tied up in the equity of your current home?

Can you do this?

Don't offer before you are in a proceedable position and forget the daft deposit idea. You may lose this one and another two will be along in a minute...

steampowered

If their house is listed through an EA, they will most likely be liable to pay the EA's fee. Even if you contact the seller direct.

Most EA contracts will say that any buyer during the term of the contract will trigger a fee.