Help with the difficult situation we are in (seller has pulled out)

TranceNRG

Hello ladies and gents,
We are currently in the process of selling our flat and buying a house and trying to get in done before end of stamp duty holiday. We accepted an offer on the flat about 3 weeks ago and we had an offer accepted on a house about 2 weeks ago but a few days ago the seller told us she no longer wanted to sell the house. Needless to say we were devastated. We are now trying to see what our options are. 

We are in West London (Northfields/Brentford area) and have a lovely 2 bed garden flat that we fully rufurbished 5 years ago when we bought it. We have been trying to sell our flat and a buy a house (minimum 3 bed) in the local area . Our flat went on the market end of November 2020. Initially we advertised for £539K (we had a minimum price of £525K in mind) but since we only had pretty low offers (under £500K) we reduced the price to £529K in February. We then accepted an offer of £520K recently.

It hasn't been easy finding a house either. We have a budget around £800K for everything. We are looking in the same area as it's ideal for both my girlfriend and I in terms of the commute to work and also because we love the area. Initially we were looking at houses that were in good condition and didn't need much doing to it. There haven't been many houses that we liked within our budget so we decided to look at houses that need work. Again it was difficult to find something that fit our criteria (same area, nice big garden, 3 decent size rooms). We finally found a house that is only about 50m from our current place and had our offer accepted. The seller is an old lady in her mid 60s who's looking to downsize. Her mum who's in a nursing home had transferred her the family house last year before she got ill. We thought the seller was a nice lady and we became friends. She did seem a bit scatty (our estate agent told us she sounded unreliable when he spoke to her on the phone) but we decided to give her the benefit of the doubt. She apparently lost the flat she was goign to buy because of her useless estate agents and she asked us for help. We spent hours looking for flats for her and went to see them with her over 3 days. She finally found another flat and had her offer accepted (she offered £50K above the asking price even though I told her to leave negotiations to me). Everything was going well. I chased her useless estate agents, her solicitor, surveyor and the seller of the flat she's buying, on her behalf as she wasn't great at doing that. I was doing that whilst also chasing my solicitor, surveyor, estate agent and mortgage advisor. This is all whilist I was working. 

Last monday (about 2 weeks in to conveyancing process) I got a message from the seller saying the flat she was buying wasn't for her. I then rang her. On the phone she told me she had seen lots of other beautiful flats. I mentioned to her we don't have enough time to get this done before stamp duty holiday. She then changed the subject and said she can't sell the house anymore as she's trying to get nursing home funding for her mum and if she sells the house now, she would lose half the money. She then hung up. I tried calling her but she didn't answer. My girlfriend rushed home from work and we went and knocked on her door but she didn't answer the door. We tried calling her and knocking on her door the next day but she didn't answer us. Her estate agents were just as bad and didn't return my calls. I'm pretty sure they were trying to avoid me. After 2 days of trying, I finally got hold of the agent. He basically said the seller felt she was buying the flat beause of us and not because she wanted it. I couldn't belieive it.

We have been feeling very despondent as we have been very kind to this lady and called her a friend (invited her around to our place and sat in the garden) yet she did this to us. We had our hearts set on the house and had arranged builders as well. 
But we know we have to get up and start looking again.

I think it's very unlikely we will find another house soon. Even if we find one within the next couple of weeks, it's unlikely we'll be able to complete before end of June. We could potentially lose our buyer as well when they find out we don't have a place to move to. I know they were also keen to get stamp duty saving.

It hasn't been easy finding this buyer so we are worried if we lose them, we will have to go through the pain again for another 3,4 months. 

I was thinking that one option could be, we sell the flat, move our furniture in to storage and rent a place for a few months until we find a house we like. However the problem with that is we are on a 2 year fixed term mortgage that ends in October 2021. I spoke to the Halifax bank and was told the early repayment fee is about £2K. Obviously we will also have to pay for removalist, storage and rental which could easily add up to £6,7K.
At least that way we get to keep the buyer and they get to enjoy the stampy duty savings. I wonder if it's worth asking them to contribute towards some of our additional costs?

Has anyone else been in this situation? What would you recommend?

Many thanks.

HampshireH

It sounds like she felt completely railroaded by you and I'm not surprised.


2k mortgage fee in the scheme of things if you have 800k to play with is nothing and sounds very worthwhile.

I doubt they will be happy contributing to yours costs. Your the one who struggled to get a buyer.

Don't make friends in future with the vendor. It's a business transaction at the end of the day remain professional throughout.

It sounds like she has been told her mother will owe care home fees from the sale which is totally plausible.

TranceNRG

I don't accept your 'she was railroaded' comment. We thought she was a friend and she had no one to help her. She had lost the flat she was planning on buying and her estate agents weren't helping her. She asked us to help her. We didn't force her to buy anything. She's the one that offered above tune asking price.
Our mistake was to trust her even though we were warned by our estate agents.

2K in not a lot in the grand scheme of things. But adding up other additional costs, it will be well over 6, 7K. And we won't be able to get stamp duty savings. So realistically we will lose 20-25k from our budget
We also don't know how long it will take to find another house. Plus we'll have the stress of moving twice. So not exactly an easy decision. 

AdrianC

I think I'm missing your actual question.

Unless it's as simple as "The person we were going to buy a house off decided not to sell. Can I make them pay my costs?"
No, you can't.
Until exchange, there is quite simply no legal contract in place. Either side can pull out for any reason or none.

That aside...
Is helping your seller complete the chain, right up to going on viewings with them, weird? Yes. Deeply.

However, that's a smokescreen.

Think of the situation she's in.
She's just realised that her mother gifting her the house will come back to bite if she sells, because her mother's care home fees need paying.
BUT... while an over-60 relative remains in residence, the property is disregarded completely...

TranceNRG

Sorry I know it was a long post but basically wanted to see anyone's been in a similar situation where the seller has pulled out and what they'd recommend.

We know there's nothing we can do in terms of the house we lost. We are just upset that we helped her but she wasted our time and energy. She had the house on the market for a few weeks and she had planning on getting government funding for her mum. If she wasn't sure about selling the house, she should have told us in the beginning and we would have walked away. The other 2 houses we liked are gone now. 

firsttimesellerldn

Selling and buying property is a business transaction. Yes it’s great if you get on with your buyer or vendor. My buyer and I have exchanged occasional texts to check on progress which has helped smooth the process. However, making friends with them in this way is a mistake and calling them directly and knocking on their door when they have told you them no longer intend to sell is hugely inappropriate and risks being perceived as harassment. 

Next time, keep things civil but maintain distance. Clearly the approach you’ve taken here did not help. 

LAD917

I dislike chains for many reasons and (as a person with no children or pets) generally find the inconvenience of moving twice to be the lesser of two evils.  Storage is cheap.

Look at it this way: you have a sure loss of £7K if you move into a rental + storage, v. a potential loss of £20K or more if you need to remarket your property and get offers closer to the sub-£500K offers you received previously.  Plus you have the risk that you aren't "proceedable" when the the next right property comes along.

If you move into a rental, you are at least a chain-free buyer ready to move quickly when the next right house comes along.  You'll have to determine how much that's worth to you, but it's definitely worth something to me.

Unless you're really sure you can get £520K+ from another buyer, I'd proceed to completion with this offer before the Stamp Duty holiday ends / the buyers walk.  The fact that your other offers were much lower would further convince me to take it v. take my chances remarketing.

Murphybear

Just one point I’d like to make from the original post.

mid 60s is not old  

it’s barely retirement age 

pinkteapot

Couple of years ago we sold our house to a couple whose vendor had pulled out RIGHT before exchange. They panic-viewed everything on the market with no onward chain and picked ours on the basis we complete in 5-6 weeks. 

I was, and still am, really surprised. In that situation I’d rent - I don’t feel a house is something to be panic bought! Assume they’re happy enough though as they’ve not sold it again. 

Your options are to rent or buy. Depends how long your buyer will wait.

If you hadn’t exchanged contracts the vendor owes you nothing - leave her alone. 

AdrianC

TranceNRG said:

We are just upset that we helped her but she wasted our time and energy.

Honestly... that was weird and more than a bit pushy on your part.

But it's almost certainly not the real issue.

She ... had planning on getting government funding for her mum.

...then she found out it simply doesn't work like that...

Her mother owned an £800k asset, her home.
Her mother gave that £800k asset away.
Her mother is still viewed by the local authority as having an £800k asset, who disregard that gift as "deprivation of assets".

People with more than ~£20k in assets do not get any funding for her care.

UNLESS

...the £800k property that was their home is still occupied by a relative over 60.

As soon as your vendor moved out of that property and sold it, the mother would be seen as having gifted £800k in cash, not a property occupied by an elderly relative. Ergo, Mum would be responsible for her own care costs. Grand a week, probably, maybe more.

THAT is why your vendor decided not to move... I'd put money on it.

TranceNRG

Murphybear said:

Just one point I’d like to make from the original post.

mid 60s is not old  

it’s barely retirement age 

She was in her mid 60s but she looked much older and she wasn't in great health. She is a heavy smoker that doesn't go outside much.