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Help to buy - settle now or at sale?
JamesN
Posts: 795 Forumite
Hi
I’ve had a look through the forum post on the help to buy guide. I guess I’m in an unusual situation as it focuses mostly on remortgaging to settle the help to buy loan.
My situation is we are looking to sell our home. We purchased through help to buy. However, we are considering renting in another area whilst we look for a home. Given all the uncertainty we’d like a quick sale (helped by not having a chain on our side). I’ve heard target can be slow to process things so thought it best to investigate settling the loan in advance of the sale. This gives rise to a few questions.
If I settle now and the valuation is £340k for the house. So £68k settlement. If I then manage to get £350k for the house I assume that’s my win. Whereas if I settle on completion the settlement would be £70k. Would target try and claw back an extra £2k if I’d settled before hand or do they have no right of recourse there.
I appreciate this isn’t likely given the valuation is rics regulated and needs supporting evidence of 3 houses. In truth it could also go the other way (which I believe benefits target as they get the higher of sale price and valuation).
The other question I had was around costs. I understand I have to get a valuation from a rics member in any event. From what I’ve seen this should be around the £250 mark (please say if that’s a rip off). However what would vary is the work from a solicitor. I’d need elements of conveyancing for the settlement but I’d also need it for the sale. I’d like to think the settlement is less work but that’s just conjecture.
Can anyone advise on what I should be paying for the solicitor to settle and whether it’s worth combining this into the sale process rather than splitting it.
Sorry for the waffle!
I’ve had a look through the forum post on the help to buy guide. I guess I’m in an unusual situation as it focuses mostly on remortgaging to settle the help to buy loan.
My situation is we are looking to sell our home. We purchased through help to buy. However, we are considering renting in another area whilst we look for a home. Given all the uncertainty we’d like a quick sale (helped by not having a chain on our side). I’ve heard target can be slow to process things so thought it best to investigate settling the loan in advance of the sale. This gives rise to a few questions.
If I settle now and the valuation is £340k for the house. So £68k settlement. If I then manage to get £350k for the house I assume that’s my win. Whereas if I settle on completion the settlement would be £70k. Would target try and claw back an extra £2k if I’d settled before hand or do they have no right of recourse there.
I appreciate this isn’t likely given the valuation is rics regulated and needs supporting evidence of 3 houses. In truth it could also go the other way (which I believe benefits target as they get the higher of sale price and valuation).
The other question I had was around costs. I understand I have to get a valuation from a rics member in any event. From what I’ve seen this should be around the £250 mark (please say if that’s a rip off). However what would vary is the work from a solicitor. I’d need elements of conveyancing for the settlement but I’d also need it for the sale. I’d like to think the settlement is less work but that’s just conjecture.
Can anyone advise on what I should be paying for the solicitor to settle and whether it’s worth combining this into the sale process rather than splitting it.
Sorry for the waffle!
0
Comments
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I'd say wait until you sell - this is what we recently did.
Positives:
You know what HTB want back and therefore what it needs to sell for so you don't lose out.
One set of conveyancing costs.
As for the RICS surveyor/valuation cost, you can't avoid it. I think we paid £175 plus VAT which seemed to be the going rate in our area. I would wait to get the valuation done until you have accepted an offer - chances are the surveyor will be willing to match his valuation to the offer amount.0 -
How confident are you that you'd get £350 and not £340? Or even £330?
I cant see in the event of you selling for more they would be entitled to a clawback any more than you could get a refund if it sold for less but check the contract maybe theres a time out period?0 -
I think you will end up doubling your conveyancing costs if you do this as two separate transactions. You might make a little bit more, but no guarantee.0
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Thanks. Seems we are thinking on the same wavelength. I might ring around some conveyancers to see if they’d be willing to do the settlement alone cheap.
A house sold last year of the same type (4 year old new build) for £345k. Ours is probably better positioned as we have more driveway. So I’ve set that as my minimum.0 -
Do check your local market. I’m selling right now for 25k less than what I would have got a year ago. Our development is still building and they’ve dropped prices slightly which has an impact on us. Brexit has made this more of a sellers market.0
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Do check your local market. I’m selling right now for 25k less than what I would have got a year ago. Our development is still building and they’ve dropped prices slightly which has an impact on us. Brexit has made this more of a sellers market.
My development is all sold now. There is a new one going up behind us and they are vastly more expensive than our asking price will be. If anything it’s gone the other way for us which is good.
Looking at getting it on the market this week so fingers crossed.0 -
Target took five days from receipt of the valuation to them to process it.
I made sure that I rang them up on the day of the HTB valuation and paid the fee. It was pretty fast.0 -
Have you got a spare £68,000 in the bank to settle the equity loan without the funds from the sale of the property?0
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foxy-stoat wrote: »Have you got a spare £68,000 in the bank to settle the equity loan without the funds from the sale of the property?
Family member is willing to lend it to me and I can pay them back once sold.0
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