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Equity Release - vendors want more than house is worth to pay it off
purplebutterfly
Posts: 3,423 Forumite
UPDATE: our offer was rejected BUT the vendor says they are going to be having things fixed over the next fortnight (one being a leaky roof which we obviously weren't aware of) so we'll keep an eye on it and see what happens. Meanwhile we'll keep looking. Thanks for all your help and advice. It genuinely cleared my mind a lot more than expected!
As per the title, the house we have offered on is an inheritance property that was apparently linked to an equity release scheme. The house is worth around £120,000 (£123,000 at most) but the vendors say that they owe £128,000 to the equity company and won't accept less than that. They marketed it at £130,000 - which was their choice and not the estate agent's valuation.
We are in love with the house and it is the first one that has been right for us in 8 months of looking but we won't give them more than it is worth. We are cash buyers and the estate agent told us she thought a £120,000 offer was a good offer.
A friend who was in the vendor's position told us that their equity release firm was willing to accept "as much as could reasonably be attained via sale, even if lower than the amount owing" and would write off the rest.
The estate seems to think that the vendors are scared of being left in debt but I am not sure if they might be trying it on a bit as the house has only been on the market 10 days (although we have been the only ones to view it despite the local market being frantic right now).
Any advice/opinions welcome
As per the title, the house we have offered on is an inheritance property that was apparently linked to an equity release scheme. The house is worth around £120,000 (£123,000 at most) but the vendors say that they owe £128,000 to the equity company and won't accept less than that. They marketed it at £130,000 - which was their choice and not the estate agent's valuation.
We are in love with the house and it is the first one that has been right for us in 8 months of looking but we won't give them more than it is worth. We are cash buyers and the estate agent told us she thought a £120,000 offer was a good offer.
A friend who was in the vendor's position told us that their equity release firm was willing to accept "as much as could reasonably be attained via sale, even if lower than the amount owing" and would write off the rest.
The estate seems to think that the vendors are scared of being left in debt but I am not sure if they might be trying it on a bit as the house has only been on the market 10 days (although we have been the only ones to view it despite the local market being frantic right now).
Any advice/opinions welcome
Living with Lupus is like juggling with butterflies
0
Comments
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They have every right to accept whatever offers they feel reasonable5
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Soz its a £130,000 or you cant have it1
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Just offer what you think it's worth and see what happens. Is frustrating but someone else's debt for whatever reason isn't your problem. Be prepared it may not work out but as long as you're happy with your actions then you'll have no regrets.4
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Forget the complicating story. You have offered £120k, the vendors have said no. You can increase your offer (which might not be accepted), withdraw your offer or leave it on the table but keep looking. Either they will get a higher offer from someone else or they won't.
But a banker, engaged at enormous expense,Had the whole of their cash in his care.
Lewis Carroll8 -
I can't see the problem. If you put £123k (or whatever) on the table as your best offer and you're right, the house won't sell and eventually the vendors will accept.If you're wrong and someone else pays more, then you'll have the satisfaction of knowing they 'overpaid.'7
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If they turn down your £120k offer, tell them you're happy to leave it on the table, then continue looking.3
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This must show what a very bad idea equity release is. It could leave your children (or whoever) with a worthless asset or one even with a negative value.
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The intention was obviously not to leave an inheritance.ProDave said:This must show what a very bad idea equity release is. It could leave your children (or whoever) with a worthless asset or one even with a negative value.1 -
The vendors are most likely the Executors of Estate. In settling the Estate they need to settle all outstanding debts. Be a catch 22 for them. As interest will still be accruing. Though surprising for the debt to exceed the property value. Might be some gamesmanship going on. In trying to get the selling price bid up.purplebutterfly said:
The estate seems to think that the vendors are scared of being left in debt but I am not sure if they might be trying it on a bit1 -
...but only insofar as it's covered by assets in the estate. The estate CANNOT leave debts to anybody.Thrugelmir said:
The vendors are most likely the Executors of Estate. In settling the Estate they need to settle all outstanding debts. Be a catch 22 for them.purplebutterfly said:
The estate seems to think that the vendors are scared of being left in debt but I am not sure if they might be trying it on a bit4
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