Buyer's Mortgage Offer About To Expire

ccfc1972

Hi, hoping for some advice here as we're in a bit of a tricky situation.
We are selling our house and purchasing one ourselves. Both sales are well underway but our house sale was started first and is a little further along than the one we are buying. Our buyers have a mortgage offer that expires in January and they are not sure that they would be able to extend the mortgage offer. We could potentially complete on our house sale within this time frame but the property we are buying probably wouldn't be completing until a few weeks later at least.

What are our options? Obviously we don't want to lose the buyer. Is it ever an option to complete on a sale but have an agreement to stay in the property until our sale goes through? I know you are supposed to vacate on the day of completion, but I just don't see too many other options. Ideally, we would just wait to exchange contracts until our new property is ready, but If they cannot extend their mortgage offer and have to complete before then or pull out, what options do we have?

Any advice gratefully received.

davidmcn

ccfc1972 said:

Is it ever an option to complete on a sale but have an agreement to stay in the property until our sale goes through?

No.
You could find somewhere else to stay temporarily?
Why are the buyers doubtful about extending their mortgage offer?

ccfc1972

Well, we could I guess but if it is just a matter of weeks, we would have to hire a removal firm twice and then we'd have to find a rental property and potentially have to move straight after Christmas, that's if they can even get it completed by then.
I've no idea why they are doubtful, they said it was a real struggle to get the mortgage sorted in the first place, so they're not sure they would be able to extend. Maybe they are just worrying over nothing but it is a real concern to us as we're desperate to not lose our new house and get everything completed.

somerlouise

davidmcn said:

ccfc1972 said:

Is it ever an option to complete on a sale but have an agreement to stay in the property until our sale goes through?

No.
You could find somewhere else to stay temporarily?
Why are the buyers doubtful about extending their mortgage offer?

I’m not sure about that. We had friends who sold their house but their new one wasn’t ready. They completed the sale and paid rent to their buyers for 2 months while the new house was finished. Of course it was all done ‘officially’ with a contract through both parties solicitors. But yes, they did complete and then stayed on in the sold house for a fixed period. 

ccfc1972

That's interesting. So we could agree to live in the house for a further month or so and basically pay their mortgage for them for that period? It wouldn't cost us any more as once we complete we wouldn't be paying the mortgage on the house anymore.
Has anyone any experience of doing this themselves? I'm not sure if it is something they would go for but I guess if it means losing the house otherwise, they might.

davidmcn

somerlouise said:

davidmcn said:

ccfc1972 said:

Is it ever an option to complete on a sale but have an agreement to stay in the property until our sale goes through?

No.
You could find somewhere else to stay temporarily?
Why are the buyers doubtful about extending their mortgage offer?

I’m not sure about that. We had friends who sold their house but their new one wasn’t ready. They completed the sale and paid rent to their buyers for 2 months while the new house was finished. Of course it was all done ‘officially’ with a contract through both parties solicitors. But yes, they did complete and then stayed on in the sold house for a fixed period. 

The buyer's mortgage lender was happy with the arrangement? The sellers complied with all the requirements of being landlords?
It's really the buyers (and potentially their lenders) which face the risk of not getting vacant possession when expected - which at the moment could potentially take months given the coronavirus restrictions on evictions and backlogs at courts. So I wouldn't expect the buyers (or their solicitors) to consider that as an option.

oniongirl

We're in this situation. Our buyers, first-timers, got a bit mortgage application happy and applied before the chain was complete, so their offer is expiring nearly 2 months before the rest of the chain. The top of the chain had promised to break the chain and move in to rented over a month ago, subject to searches, but searches have been back for a fortnight and no movement.

I'm hoping our FTBs will be able to extend their mortgage offer... they have a 20% deposit so it's not impossible. But if not there will probably be a long wait whilst they reapply (IF they reapply - perhaps the rates aren't as favourable now and they don't want to commit to a house that costs as much as ours, OR they might ask for a price reduction, which will means us needing to pass the reduction up the chain which just isn't likely at all). 

I've given up, really. If it happens, it happens. If it doesn't, that telly we bought in the black friday sale is going to look ridiculous in our little terrace until we find another house we like as much (I've not stopped looking at Rightmove since our offer was accepted, and I haven't seen anything remotely as nice for the same price.)

oniongirl

ccfc1972 said:

That's interesting. So we could agree to live in the house for a further month or so and basically pay their mortgage for them for that period? It wouldn't cost us any more as once we complete we wouldn't be paying the mortgage on the house anymore.
Has anyone any experience of doing this themselves? I'm not sure if it is something they would go for but I guess if it means losing the house otherwise, they might.

Aren't there any rules about this on your buyers mortgage? Surely they would need a buy-to-let mortgage. (I say "surely" - I have no idea, but I always thought you couldn't just buy a house with a regular mortgage and rent it out).

ccfc1972

oniongirl said:

We're in this situation. Our buyers, first-timers, got a bit mortgage application happy and applied before the chain was complete, so their offer is expiring nearly 2 months before the rest of the chain. The top of the chain had promised to break the chain and move in to rented over a month ago, subject to searches, but searches have been back for a fortnight and no movement.

I'm hoping our FTBs will be able to extend their mortgage offer... they have a 20% deposit so it's not impossible. But if not there will probably be a long wait whilst they reapply (IF they reapply - perhaps the rates aren't as favourable now and they don't want to commit to a house that costs as much as ours, OR they might ask for a price reduction, which will means us needing to pass the reduction up the chain which just isn't likely at all). 

I've given up, really. If it happens, it happens. If it doesn't, that telly we bought in the black friday sale is going to look ridiculous in our little terrace until we find another house we like as much (I've not stopped looking at Rightmove since our offer was accepted, and I haven't seen anything remotely as nice for the same price.)

Would they need to re-apply though? Can the banks not just agree to an extention on the same offer?

oniongirl

They can.... but they might not. Things are weird right now. I wouldn't bank on it (sorry for the pun)

ccfc1972

So stressful. This has been going on for months and we thought everything would be sorted by now. We didn't think this would even be a concern.