Sub sales and Back to back transaction Mortgage

K_S

london21 said:

K_S said:

london21 said:

MWT said:

K_S said:a

Like you said make sure you have a plan B and C. Good luck!

Personally I’d go straight for plan ‘C’ for  ‘cash’…

This transaction should have started with a bridging loan ready to go, or cash in the bank.

Since the OP has said that they can’t afford to lose the deposit and that they could raisie the cash from friends/family, I’d go straight for that at this point, and then take the time to arrange the right finance with the time to do it properly…

If bought with cash. Once my name is on land registry can I then apply for a mortgage or will have to wait 6 months? 

@london21 Some lender will not allow until 6 months have elapsed, but there are a sufficient number of maintream lenders that will consider.

  Surely the auction property they are not expecting me to pay for the property without first been transferring to the vendor’s name first. 

@london21

The auction agreement often includes this stipulation upon the buyer -

MWT

london21 said:

Surely the auction property they are not expecting me to pay for the property without first been transferring to the vendor’s name first. 

Sorry if this sounds harsh, but you need to get any thoughts of 'leniency' or variation in the completion date out of your head and focus on doing what you need to be able to close on the agreed date, or the penalty under your contract will be enforced.

Properties are not sold at auction because they are in great condition and have 100% clean documentation.

Auctions are generally not for buyers wanting a traditional mortgage, doubly so at the moment when everyone else is clogging up the system trying to complete before the stamp duty goes back up....

Have your cash or line-of-credit ready to go before you put in a bid because when the hammer falls, it is sold, and you have agreed the completion date.

Now you need to be able to uphold your end of the deal...

There are specialist auction finance providers out there but they are not cheap and time is running out for anything other than a cash solution ....

london21

K_S said:

london21 said:

K_S said:

london21 said:

MWT said:

K_S said:a

Like you said make sure you have a plan B and C. Good luck!

Personally I’d go straight for plan ‘C’ for  ‘cash’…

This transaction should have started with a bridging loan ready to go, or cash in the bank.

Since the OP has said that they can’t afford to lose the deposit and that they could raisie the cash from friends/family, I’d go straight for that at this point, and then take the time to arrange the right finance with the time to do it properly…

If bought with cash. Once my name is on land registry can I then apply for a mortgage or will have to wait 6 months? 

@london21 Some lender will not allow until 6 months have elapsed, but there are a sufficient number of maintream lenders that will consider.

  Surely the auction property they are not expecting me to pay for the property without first been transferring to the vendor’s name first. 

@london21

The auction agreement often includes this stipulation upon the buyer -

The contract states the below.
with point 2 thought they will have to register to provide me the buyer with AP1.
without the AP1, mortgage wil be inpossible will have to be cash or bridging finance. 
1. The seller is selling as the contractual purchaser of the Property. The buyer acknowledges that the seller is only the contractual purchaser and shall not be entitled to raise any requisition arising from the seller not being the registered proprietor of the Property and the buyer shall not be entitled to refuse to complete for this reason.

2. The seller shall, in addition to the Transfer Deed provide to the buyer:
a) The Transfer Deed from the registered proprietor to the seller
b) SDLT5 Certificate in respect of the Transfer to the seller
c) Form AP1 in respect of the transfer to the seller

K_S

london21 said:

K_S said:

london21 said:

K_S said:

london21 said:

MWT said:

K_S said:a

Like you said make sure you have a plan B and C. Good luck!

Personally I’d go straight for plan ‘C’ for  ‘cash’…

This transaction should have started with a bridging loan ready to go, or cash in the bank.

Since the OP has said that they can’t afford to lose the deposit and that they could raisie the cash from friends/family, I’d go straight for that at this point, and then take the time to arrange the right finance with the time to do it properly…

If bought with cash. Once my name is on land registry can I then apply for a mortgage or will have to wait 6 months? 

@london21 Some lender will not allow until 6 months have elapsed, but there are a sufficient number of maintream lenders that will consider.

  Surely the auction property they are not expecting me to pay for the property without first been transferring to the vendor’s name first. 

@london21

The auction agreement often includes this stipulation upon the buyer -

The contract states the below.
with point 2 thought they will have to register to provide me the buyer with AP1.
without the AP1, mortgage wil be inpossible will have to be cash or bridging finance. 
1. The seller is selling as the contractual purchaser of the Property. The buyer acknowledges that the seller is only the contractual purchaser and shall not be entitled to raise any requisition arising from the seller not being the registered proprietor of the Property and the buyer shall not be entitled to refuse to complete for this reason.

2. The seller shall, in addition to the Transfer Deed provide to the buyer:
a) The Transfer Deed from the registered proprietor to the seller
b) SDLT5 Certificate in respect of the Transfer to the seller
c) Form AP1 in respect of the transfer to the seller

@london21 I don't have the expertise to comment in depth on the conveyancing part of things. But with regard to financing, to put it bluntly, the vendor or auction house does not care about or want to know about what route you use to finance the auction purchase.

The onus is on the bidder to sort it out any which way. The seller is protected by the terms of the auction.

user1977

london21 said:

K_S said:

london21 said:

K_S said:

london21 said:

MWT said:

K_S said:a

Like you said make sure you have a plan B and C. Good luck!

Personally I’d go straight for plan ‘C’ for  ‘cash’…

This transaction should have started with a bridging loan ready to go, or cash in the bank.

Since the OP has said that they can’t afford to lose the deposit and that they could raisie the cash from friends/family, I’d go straight for that at this point, and then take the time to arrange the right finance with the time to do it properly…

If bought with cash. Once my name is on land registry can I then apply for a mortgage or will have to wait 6 months? 

@london21 Some lender will not allow until 6 months have elapsed, but there are a sufficient number of maintream lenders that will consider.

  Surely the auction property they are not expecting me to pay for the property without first been transferring to the vendor’s name first. 

@london21

The auction agreement often includes this stipulation upon the buyer -

The contract states the below.
with point 2 thought they will have to register to provide me the buyer with AP1.
without the AP1, mortgage wil be inpossible will have to be cash or bridging finance. 
1. The seller is selling as the contractual purchaser of the Property. The buyer acknowledges that the seller is only the contractual purchaser and shall not be entitled to raise any requisition arising from the seller not being the registered proprietor of the Property and the buyer shall not be entitled to refuse to complete for this reason.

2. The seller shall, in addition to the Transfer Deed provide to the buyer:
a) The Transfer Deed from the registered proprietor to the seller
b) SDLT5 Certificate in respect of the Transfer to the seller
c) Form AP1 in respect of the transfer to the seller

That's just listing the documents they'll provide you with, it doesn't say they'll be registering their title first. They don't need to.

london21

user1977 said:

london21 said:

K_S said:

london21 said:

K_S said:

london21 said:

MWT said:

K_S said:a

Like you said make sure you have a plan B and C. Good luck!

Personally I’d go straight for plan ‘C’ for  ‘cash’…

This transaction should have started with a bridging loan ready to go, or cash in the bank.

Since the OP has said that they can’t afford to lose the deposit and that they could raisie the cash from friends/family, I’d go straight for that at this point, and then take the time to arrange the right finance with the time to do it properly…

If bought with cash. Once my name is on land registry can I then apply for a mortgage or will have to wait 6 months? 

@london21 Some lender will not allow until 6 months have elapsed, but there are a sufficient number of maintream lenders that will consider.

  Surely the auction property they are not expecting me to pay for the property without first been transferring to the vendor’s name first. 

@london21

The auction agreement often includes this stipulation upon the buyer -

The contract states the below.
with point 2 thought they will have to register to provide me the buyer with AP1.
without the AP1, mortgage wil be inpossible will have to be cash or bridging finance. 
1. The seller is selling as the contractual purchaser of the Property. The buyer acknowledges that the seller is only the contractual purchaser and shall not be entitled to raise any requisition arising from the seller not being the registered proprietor of the Property and the buyer shall not be entitled to refuse to complete for this reason.

2. The seller shall, in addition to the Transfer Deed provide to the buyer:
a) The Transfer Deed from the registered proprietor to the seller
b) SDLT5 Certificate in respect of the Transfer to the seller
c) Form AP1 in respect of the transfer to the seller

That's just listing the documents they'll provide you with, it doesn't say they'll be registering their title first. They don't need to.

Ok that’s a misunderstanding on my side then. Why would they list a transfer deed and AP1 if not been provided. Will have to ask my solicitor because this is my first auction property and I am getting more confused. 

london21

How do I know this isn’t fraud. The seller’s name is not on the land registry. The purchase price is a huge amount and can’t afford to lose my 10% deposit. 

[Deleted User]

If you buy that property it might take weeks for your name to be updated with the land registry. During those weeks no one is going to say you dont own that house because you would have all the paperwork to show you purchased it and paperwork to confirm it is due to go in to your name.   Thats no different to the current owner,   its not updated at LR but that doesnt change the fact that he/she owns it.  Your solicitor (and theirs) will be doing plenty due diligence to ensure the correct person is selling the property.  In case of an auction all this will have been done prior to it going under the hammer

Identity fraud isnt uncommon with property,  it tends to be in certain communities where certain names are very common so it isnt unlikely for a tenant to share the same name as their landlord.   After a few high profile cases in the industry everyone is very careful to ensure the right person is selling the property.   


Do you have the ability to buy this as cash and then sort all the finance out later?   Virgin who you have approached are currently taking the best part of 2 working weeks to review documents.   There is little chance of it being offered with no questions so you are looking at 3 or 4 weeks minimum of underwriting.  

user1977

london21 said:

How do I know this isn’t fraud. The seller’s name is not on the land registry. The purchase price is a huge amount and can’t afford to lose my 10% deposit.

Have you actually talked to your solicitor about this, as it sounds like you need someone to sit you down and explain how this sort of transaction works?

london21

Deleted_User said:

If you buy that property it might take weeks for your name to be updated with the land registry. During those weeks no one is going to say you dont own that house because you would have all the paperwork to show you purchased it and paperwork to confirm it is due to go in to your name.   Thats no different to the current owner,   its not updated at LR but that doesnt change the fact that he/she owns it.  Your solicitor (and theirs) will be doing plenty due diligence to ensure the correct person is selling the property.  In case of an auction all this will have been done prior to it going under the hammer

Identity fraud isnt uncommon with property,  it tends to be in certain communities where certain names are very common so it isnt unlikely for a tenant to share the same name as their landlord.   After a few high profile cases in the industry everyone is very careful to ensure the right person is selling the property.   


Do you have the ability to buy this as cash and then sort all the finance out later?   Virgin who you have approached are currently taking the best part of 2 working weeks to review documents.   There is little chance of it being offered with no questions so you are looking at 3 or 4 weeks minimum of underwriting.  

Ok, I have not made any more applications because without proof that the property will be registered or has been registered dont want to damage my credit rating whcih is high and sole application made is HSBC. A broker i apprached today was going to apply with Barclays as Virgin not on my solicitor's panel but for now on pause bevause until i know ownership will be sorted for sure mortgage funds likely wont be released after mortgage if offered. . 

I have contacted my solicitor, i found them and decided to use them because of the excellent reviews but do not think he is experienced with auction property although quick response so will email him for some clarification.