Buying property off a relative, help needed

aeg85

Hello,

My husband and I have decided to put our house on the market as we would really like to buy his Uncle's house which has been on the market for a little while now. We couldn't understand why it hadn't sold yet but we discovered the property is leasehold and has less than 60 years left on the lease. After getting some legal advice we were told that no mortgage company will give a mortgage on a lease this low. His uncle is aware of this but doesn't want to deal with it, we asked him to find out how much it is to buy the freehold and it will cost between £6-8K. He has also asked if we do put an offer in to not go through his estate agent as they have been useless - it will also save him about £2K.

The house is on sale for £215K and was reduced from £225K last month (before we decided that we would like to buy it).

We're getting our house valued and put up for sale this week and depending on what that comes back with we were going to try and offer his uncle £195K as we will have to deal with buying the freehold. The house is in good condition but will need a new kitchen at some point too.

Is this too low? I feel like it's worse dealing with family as you don't want to offend them. Any guidance would be great.

Many thanks!

Rambosmum

He'll either have to end his contract with his estate agent or likely pay them anyway. Would you have approached the uncle to buy his house if he hadn't put it for sale?


As for the price, how do you intend to buy it? With a mortgage or can you afford £195 without a mortgage until the leasehold issue is resolved?

aeg85

It's only that he is selling that we have considered it, we bought our current house for a similar price so we can afford it but only with a mortgage. We don't want to have the property as leasehold so would have to purchase the freehold with the sale.

Thrugelmir

aeg85 wrote: »

He has also asked if we do put an offer in to not go through his estate agent as they have been useless - it will also save him about £2K.

Suggest that you tell him to read his contract with them. Though the length of the remaining lease and his unwillingness to deal with the matter are most likely the real issues. Not the effectiveness of the EA to market the property.

Tom99

£6-£8k is too cheap unless the freeholder is giving it away. More like £25,000+ if they have their head screwed on.
How much do you think it will be worth when you have aquired the freehold?

aeg85

I think it's because it's been passed over to a new company and his uncle has been living in the property for the past 20 years which is why he was quoted that price.

I think the property could be worth around £240K with a new kitchen and extra toilet room added in the future.

PasturesNew

He needs to start the process. He can buy the extended lease on the day you buy the house if you give him the money for that too. That's the quickest/easiest way to do it... he doesn't have to pay for it, you get it at "his rate" and don't get problems further down the line, or forget, or something.

Agent might still want paying.... he needs to double/triple check his contract for that.

aeg85

Yes, I know, but we have to pay the freehold in order to get a mortgage, we don't want to have a leasehold property so we're happy to pay for it. He is aware he has to start the process so that we can finish it with the sale if the house. I was just wondering if £195K is too cheap?

PasturesNew

aeg85 wrote: »

I was just wondering if £195K is too cheap?

I'd say so.... I'd shut the door in your face and change my phone number.

However .... what's your local market like, why's he selling ... he might feel "glad to get rid of it, never believed that higher figure... I just want out" ... or he might feel "pffft reduced, how DARE they ... can't people see my house at the higher amount was an absolute steal??"

It doesn't work on numbers alone.

Tom99

aeg85 wrote: »

Yes, I know, but we have to pay the freehold in order to get a mortgage, we don't want to have a leasehold property so we're happy to pay for it. He is aware he has to start the process so that we can finish it with the sale if the house. I was just wondering if £195K is too cheap?

[FONT=Verdana, sans-serif]I would suggest you make absolutely certain the freehold can be purchased at the same time as the lease and at a known price, before you offer £195k.[/FONT]
[FONT=Verdana, sans-serif]Then tell your uncle that's all you can afford, bearing in mind the cost of the freehold, and you quite understand if he wants to keep it on the market and hold out for more.[/FONT]

aeg85

That's what I was thinking, if I feel it's too cheap and I have to ask someone else then I know it is too low.

If the house is on at £215K but we need to pay £6-8K surely he can't expect us to offer the full price. The house is in very good condition, just will need a new kitchen in the next couple of years. This is their second attempt at trying to sell in the past year with no takers whatsoever.