Renting to save the property chain

itssmallstuff

So, we put our home on market in Oct 21. Accepted an offer for full asking price in Oct21 from FTB.

We offered on our onwards purchase in Nov and it was accepted. Just after Christmas, the property we were buying went for probate as the seller lady passed away. We waited until Mid Jan as there was not much stock on market.

In Feb, we offered another property and it was accepted. The sellers had found their onwards property too which was chain free.


FTB -> Me-> my sellers -> chain free 

We were due to exchange contracts end of Feb 2022, but my sellers pulled out of their purchase due to something serious in Survey report.

So, in total, my FTB have been waiting for 4.5 months now, and are now starting to get bit nervous. Their landlord is pushing for tenancy renewal which isn't helping.

1. My sellers are particularly interested in Chain free purchase. They accepted my offer as the chain was very all and we were ready to exchange.

2. I love the house we are buying and don't want to lose it. 

3. Should my FTBs pull out, I think it will upset my onwards purchase too. 

4. Do you think this will work -

   Exchange contracts with my buyers end of March 2022, with 60 days completion

Hope my sellers find someone in that 60 days period

I move into Airbnb/rental depending on the purchase situation.

Question - how can I get my sellers to commit that they will sell me the house in certain period (say 6 months)? Is they don't find anything in 6 months, they move into rental ..

I really don't want to upset my sellers... How should I approach this? Worth chatting with the sellers EA?

Slithery

Good luck getting your buyers to agree to 2 months between exchange and completion.

itssmallstuff said:

Question - how can I get my sellers to commit that they will sell me the house in certain period (say 6 months)? Is they don't find anything in 6 months, they move into rental ..

You can't.

MalMonroe

Hi, as Slithery says above, you can't get your sellers to commit to anything. Certainly not moving into a rental property!

And you would be foolish to move before you have somewhere to move to, imo. Unless you really want to, of course.

I say this as someone who once (when a confident first time buyer) waited and waited and then waited some more for sellers to move out of a house we had our hearts set on, only to be told just before completion that they had decided to stay where they were. Lesson learned - you can't count your chickens, etc . . .  We eventually found another home - in a better area which was more suited to our circumstances but were very upset at the time. 

Your buyers - who must be just as disappointed as you are - can either wait or pull out. Same as you can either wait or pull out. But I definitely wouldn't leave my home until I was sure that it was the best thing for me.

Are you sure that your sellers, as you call them, are still totally committed to moving?  

itssmallstuff

MalMonroe said:

Hi, as Slithery says above, you can't get your sellers to commit to anything. Certainly not moving into a rental property!

And you would be foolish to move before you have somewhere to move to, imo. Unless you really want to, of course.

I say this as someone who once (when a confident first time buyer) waited and waited and then waited some more for sellers to move out of a house we had our hearts set on, only to be told just before completion that they had decided to stay where they were. Lesson learned - you can't count your chickens, etc . . .  We eventually found another home - in a better area which was more suited to our circumstances but were very upset at the time. 

Your buyers - who must be just as disappointed as you are - can either wait or pull out. Same as you can either wait or pull out. But I definitely wouldn't leave my home until I was sure that it was the best thing for me.

Are you sure that your sellers, as you call them, are still totally committed to moving?  

1. House prices in the area we are buying are crazy with lot more buyers than sellers. Properties are all north of 700k minimum. The one we are buying has an extension 3x5m and in a condition ready to move in. The semi next door property also got listed few days ago, doesn't have any extension, also sold for same price. So, we are getting a good deal.

2. The sellers are definitely committed to moving. I don't know if they will consider renting/moving with kids at all for a period though. Assume not. Also, we are worried that sellers may change mind if my FTBs pull out as that may delay the transaction/put them into a longer chain...

3. We definitely want to move out for DS school sooner or later.

Snookie12cat

I think you need to consider how hard it was to find your buyer? Did it take a week or a year. 
You sellers have found no where so if it took you a few weeks before and your buyer drops out they wouldn't even need to know, just remarket and start again. 

If the chain was complete it's different. The question is, how much do you need your buyer? 

itssmallstuff

Snookie12cat said:

I think you need to consider how hard it was to find your buyer? Did it take a week or a year. 
You sellers have found no where so if it took you a few weeks before and your buyer drops out they wouldn't even need to know, just remarket and start again. 

If the chain was complete it's different. The question is, how much do you need your buyer? 

I am interested in protecting my onward purchase more than my buyers. Although, buyers are good, agreed to stick to the offer inspite the bank undervalued by 15k. The buyer is a tradesperson, so isn't too worried about asthetics like ceiling cracks where plasterboard join etc. A new buyer may be difficult! Very different and could pull out late causing all kind of risk to my onwards purchase..... 

I had 2 offer of full asking price(450k) but only one was from FTB. Property was listed guide price of 425k-450k. I had other 4 offers between 425-440k too.

I see the properties near by have increased in value (3 bed midterrace is now 425k, used to be 375k), mine is 3 bed semi.. so, I should get the full asking price if I had to remarket, it's just the delays and troubles....

jenni_fer

We're in a similar position and I think it does come down to how quickly do you think you will sell yours again if needed.
Our first chain ended up collapsing completely and then we waited a few months before starting again but both times we've accepted and above asking price offer following the one viewing morning so we're confident that we'll be able to replace our buyer should we need to. 

I really feel for the bottom of the chain though. Like you, the FTB at the start here had their offer accepted in October and were in mid March with us having only just found somewhere and that level need to find something too so the chain still isn't complete. 
BUT if they pull out, they start again. The way the process is set up at the moment, you can't even see a property if yours isn't under offer and even then you have to wait for the open house in 3 weeks time,  so even if they pull out they are unlikely to get to move any quicker. Which is why we all just hang on in there and hope it comes together soon! 

Personally I would never move us into rented, it makes no sense to us financially, it makes no sense to us practically and ultimately we aren't that desperate to move that we are prepared to take the risks of not being on the property ladder. 

I hope it all comes together for you soon. 

Snookie12cat

Echo the above. I wouldn't go into rented, risk a house I love living in (although a bit small), to potentially not find somewhere for a year, then be paying out thousands in rent in the time it takes to do this. Plus the added inconvenience. 
My house seems to sell very quickly when I list it and as such I would risk losing any buyer no matter how good, if I didn't have an onward to go to. At the end of the day, it's just a house and there will be others to buy if the worst happened. 

Slithery

itssmallstuff said:
I see the properties near by have increased in value (3 bed midterrace is now 425k, used to be 375k), mine is 3 bed semi.. so, I should get the full asking price if I had to remarket, it's just the delays and troubles....

A drawback of this is that the longer it takes your vendors to find their onward property the bigger the chance that they'll drop you and remarket as their property will also have increased in value since your offer.

TripleH

In situations like this, moving into rental is a good solution depending where you are in the chain and your priorities.

If selling your house is the most important aspect (eg. downsizing, relocating) then moving into rental makes more sense.

If you have an expectation that your sellers to go into rental, why can't you go into rental for your buyers? (That's hypothetical, but you can't expect others to do something you're not prepared to do to salvage a sale).

itssmallstuff

Our priority is kids education. It's one of the main reason to relocate. We do not know the area we are moving to well, but based on our research it's a very sought after location for families with kids due to primary and grammar schools. 

Here is what I'm thinking

1. I will continue to wait for my vendors to find a property. They are only looking for chainfree properties only and do not need a mortgage, so it should be quick once the chain is complete. Last time the chain was complete, it only took 3 weeks after their offer was accepted until ready to exchange (but they pulled out for structural issues)

2. I agree, if my buyers pull out, they will anyway have to wait months to get to a point they are with purchase of my house. So, it makes sense to wait even though it might take a little more time.

3. Interest rates have (and continue to) increased since, so starting that process will end up with expensive mortgage payments

4. Inflation is high, and given my buyers are self employed, it may be in their interest to wait than start again... Potentially risking everything.

Thank you all for your valuable advice. I'll keep going as it is for another couple of months... Hopefully it will be done by them.... Regards