Advice on difficult sellers situation

Damago

We viewed a house initially at the end of last year, it’s been up for sale for well over a year, the owners are split up. 4 weeks ago we accepted an offer on our house that we have to sell in order to purchase a new property, and since then have been going back and forward with offers on this house that we want to buy, our final one has been accepted.
However - EA advised the owners have an IVA that they need to sort out before we can proceed with anything as they don’t want funds from their house sale to be taken, so I’m unable to instruct solicitors yet, they have told us it will take 4 weeks to sort out. I guess there is nothing we can do other than wait.

We’ve been looking for a house since the end of last year and can’t find anything similar or that we like as much in the right location otherwise we would have walked away from this one a while ago (there have been other issues with one of the sellers, so much so the EA was going to stop marketing their house)

I’m worried that our buyers will now be looking elsewhere as everything is on hold for 4 weeks, they have a date that they need to be out of their rental property by so there is a risk of losing them too.

I’d not heard of an IVA before now so am not familiar with what it is other than having a quick google, and obviously I don’t know the ins & outs of our sellers situation but I’m worried there’s going to be issue after issue here.

Has anyone else bought a house from sellers in a similar situation, or have any advice of what to expect / look out for?

chunkytfg

There is nothing stopping you instructing a solicitor. Just when you sign up with them give them instructions to not proceed with any chargeable work until you give the go ahead.

hazyjo

Keep your eyes on the market still and buy elsewhere if something comes up. They should have sorted this before marketing IMO.


The only thing you risk is your buyers. When do they have to be out of their rental? They could actually stay put, but it won't make them very popular. It's likely to take 3 months to go through anyway, with this extra 4 week delay making it more like 4 months (average). I am guessing their exit-date is before that?


They will find it hard to locate a short term rental.

Damago

Thanks chunkytfg - sorry I may have gotten my wording wrong with ‘instructing’ we have our solicitor all lined up but can’t ask them to proceed with anything chargeable yet as our sellers don’t want to / can’t officially say that they have accepted an offer as from what I understand, this means the debt can be recovered from the funds of their house sale.

Thanks hazyjo - I agree they should have sorted this well before this point especially given that the house has been up for sale for over a year, but then again I’m not sure if the IVA debt issue is due to them paying the mortgage all this time / not being able to afford it, saying that they haven’t reduced the price for a quick sale. As I say I don’t really understand how IVA’s work.
Our buyers need to be out of their rental property in 12 weeks (no option to extend) - which will mean 8 weeks from when we can ask solicitors to proceed. They are FTB and the EA has said they’ve explained the situation to them, asked if it’s possinle for them to stay with parents if completion doesn’t happen before then but I’m worried this is going to put them off, and not everyone has the option to stay with parents.

Nobbie1967

As suggested above, it's unlikely that your buyers have to leave their current accommodation in 12 weeks, it's more likely that this is the end of their fixed term after which they could stay until an S21 was issued giving notice of ending the tenancy and then court action to get a legal eviction notice and then enforcement action. In reality they can probably stay on for months. Might be worth confirming the exact situation with your buyers regarding their current tenancy.

Damago

Hi Nobbie1967, our buyers are currently renting a room in a house that’s been sold so they do need to be out by that date (as does everyone else in the house). I don’t really want to put it on them to have to go through all of this because of our buyers situation, I’m worried this situation will scare them away as it is.

Davesnave

Damago wrote: »

Hi Nobbie1967, our buyers are currently renting a room in a house that’s been sold so they do need to be out by that date (as does everyone else in the house).

They really don't. It's not their fault that a landlord put the house up for sale without guaranteed vacant possession, nor is it of their choosing that someone is attempting purchase without it.

All the people concerned are adults and fully responsible for their actions.


Of course, the buyers may not take this view, but it's correct, not just an opinion.

hazyjo

Damago wrote: »

Hi Nobbie1967, our buyers are currently renting a room in a house that’s been sold so they do need to be out by that date (as does everyone else in the house). I don’t really want to put it on them to have to go through all of this because of our buyers situation, I’m worried this situation will scare them away as it is.

Then why don't you sell and take a short rental/stay with family? Worth considering.

weather83

As a renter, I would be very miffed if the people I was buying off told me to stay in my rented accommodation after I needed to be out of it!

Yes, it's their right right to stay until court action, but it would potentially be stressful/unpleasant for them.

Could you move into rented accommodation Damago? It's a pain, but might be preferable to losing your buyers?

Depends how much you love the house you're buying, and how long (if ever) you think it'll take the sellers to sort themselves out. As you say, they've had a year to do this, and the EA had so many issues with them they were going to stop marketing the house...

Def keep an eye out in case anything else comes up. I would even book to see something else with the same EA, as that might scare the sellers into action.

Damago

Thanks weather83 - that’s my thoughts exactly on asking / expecting our buyers to sort out another rental especially as they’re FTB’s I think it could really put them off.
I’ve had a look at options for rented accommodation near us but the cheapest I can find is 30% more a month than our current monthly mortgage payments, that’s not taking into account deposit and other fees, and that’s for a standard rental so I suspect short term let’s might be pricier? I’ll need to look into this more, and the possibility of moving in with family and paying for storage elsewhere - that would be stressful in our situation but do-able.

We’re really annoyed that they didn’t tell us about their IVA situation until after they accepted our final option.

If any other houses do come up we will definitely view but so far nothing comparable has come up in the last 3 months so I’m not feeling overly optimistic on that front.

[Deleted User]

Damago wrote: »

EA advised the owners have an IVA that they need to sort out before we can proceed with anything as they don’t want funds from their house sale to be taken, so I’m unable to instruct solicitors yet, they have told us it will take 4 weeks to sort out.

I'm intrigued to know what your vendors are going to "sort out". An IVA is a formal (i.e. legally binding) debt solution which is arranged and supervised by an Insolvency Practitioner - the vendors are legally obliged to notify their IP of any changes to their financial situation and certainly any proceeds from their house sale would expect to be included in their IVA to be paid to their creditors. An IVA typically lasts five years, so the question I'd be asking the EA is How far into their IVA are they? Maybe it's due to end in a few weeks, hence their message that "it will take 4 weeks to sort out".

I'd also be annoyed about their lack of honesty/integrity, but sadly this seems to be fairly typical in house buying/selling. I'd keep your expectations low about this house, but wish you well and will be keeping my fingers crossed for you that it works out well.