Daughter being pushed to exchange - 1st time buyer in long chain

[Deleted User]

Same ady exchange/completion is what 99% of my transactions are doing at the moment.  Less risk in someone being unable to move due to ill health. 

Where is the risk to the bottom of the chain on doing a same day exchange/completion?  If it doesnt happen they are in the same situation as they are now. if it does happen they can get the keys and leave the property empty for a couple of weeks to get rid of any virus and then move in when they feel comfortable to do so

[Deleted User]

Deleted_User said:

Same ady exchange/completion is what 99% of my transactions are doing at the moment.  Less risk in someone being unable to move due to ill health. 

Where is the risk to the bottom of the chain on doing a same day exchange/completion?  If it doesnt happen they are in the same situation as they are now. if it does happen they can get the keys and leave the property empty for a couple of weeks to get rid of any virus and then move in when they feel comfortable to do so

With same day exchange/completion, how do removals work at the moment? Would all parties have to self-hire a van on the day and move themselves?
Thanks
Andy

Thrugelmir

labrajaws said:

Deleted_User said:

Same ady exchange/completion is what 99% of my transactions are doing at the moment.  Less risk in someone being unable to move due to ill health. 

Where is the risk to the bottom of the chain on doing a same day exchange/completion?  If it doesnt happen they are in the same situation as they are now. if it does happen they can get the keys and leave the property empty for a couple of weeks to get rid of any virus and then move in when they feel comfortable to do so

With same day exchange/completion, how do removals work at the moment? Would all parties have to self-hire a van on the day and move themselves?
Thanks
Andy

Self move probably isn't practical for everybody in the chain. 

[Deleted User]

Based on my experience over the last few weeks,  everyone sucks it up and decides if they want to get involved in a stressful simultaneous exchange/completion or they put the whole thing on hold indefinitely.   Solicitors are not getting involved in future dating completions as the risk of someone being unable to move is too high. 

Sometimes you can get everyone lined up and the removals booked and then someones funds dont come through on time and its all messed up.  You then try another day or give up and put it on hold until the lockdown measures are over.  

Personally, I wouldnt do it if i was in the middle of a chain,  too much hassle of packing everything up and then maybe you dont end up moving.   If i was at the bottom of the chain though I wouldnt see any issue with it.  If it happens they can sort removals out later and move a week or so after they get the keys. If it doesnt happen then they havent lost anything.  

The bottom of the chain can agree to a simultaneous transaction risk free,   the rest of chain can make their choice.  If the rest of the chain doesnt agree to it then your daughter can honestly say it wasnt their fault it didnt go through

csgohan4

I bought my house not because it was an investment and I will end up in negative equity, but to live in. Buying a house will mean there will always be a risk of negative equity, property crashes e.t.c

OP you may not have the right hat on, will you be living there for the majority of your life? It is more than a house price to other people, otherwise you will be forever waiting like crashy for that house crash and never buy

Of course you can advise as a parent, but they are the ones that will be buying and living, they aren't BTL nor is it an investment as the primary focus

blinko

I think to add, NEVER TRUST an estate agent, ALWAYS look after your own interest.

BUT also to add please don't take it personally it's their job to give the transaction a push from both sides. They will also being pressuring the other side to hurry up.

let us know how it goes, there is no easy answer here only lessons and experience to be gained which ever decision you take

SouthLondonUser

chris.heighton said:

I'm no expert.

But, I'd say if they love the house to go for it. There is still a house shortage, so I doubt there will be any major impact on house values (but it doesn't happen till it happens!)

Not sure if the below helps;
https://www.theguardian.com/business/2020/apr/06/house-prices-will-not-fall-far-despite-lockdown-says-study?CMP=Share_AndroidApp_WhatsApp

Have you even read the link? That is a "study" by Knight Frank, an estate agency! An estate agency has carried out a "study" which concludes the impact on the real estate market shouldn't be too bad. Do you see a slight conflict of interest there??

Also:

"Behind the Knight Frank forecasts is an assumption that the British economy will shrink by 4% in 2020 before growing by 4.5% next year as the pandemic recedes"

And what if this assumption turns out to be false?

This is not a financial crisis, it's much worse. Nothing like this has happened in the last 100 years or so. These are really unchartered waters.

SouthLondonUser

xylophone said:

This is a home rather than an investment? And if house prices drop it will be across the board?
You say that they love the house.
Why should they not proceed to exchange?

Lots of potential reasons. Why should they proceed to exchange, especially since not many details have been given on the situation of the OP's daughter?

What if house prices go down substantially? What if buying the same house will be cheaper in 1-2 years? That saving alone could offset the cost of renting in some cases; it depends on the case.

What if house prices go down and it becomes hard to refinance the mortgage in a couple of years?

What if they take a 5-year mortgage to limit that risk, but then they have to move elsewhere for work? Could they rent it out? Would that cover the mortgage? Would they have to pay early repayment charges?

How secure are their jobs? What if they lose them? Would it have been better to have access to the money set aside for a house deposit and use that as a rainy day fund in this emergency?

What if they buy but then cannot move or cannot furnish the property for a while? How long would they have to pay rent + mortgage? Eg Ikea doesn't deliver heavy items which require two people.

To be clear, I am not saying civilisation will end. The truth is, no one knows. But the risks and the reasons for not buying now are many.

graphs

Tell them to offer 15% less than they agreed.