Sell property asap but stay in it, advice please

Rellen

Keep_pedalling said:

How old are you? If over 55 could equity release pay off the existing mortgage? 

Could downsizing pay it off?

Unfortunately not I’m 37 so not an option. 

Yes, The plan was to use equity for another cheaper home when I knew I couldn’t remortgage this one and family member buying as investment fell through. 

But also last week I got a default notice for credit card so I’m pretty much screwed credit /mortgage wise for 6 years I think. 

Like I say it’s been a very rough few days so I appreciate all this help and advice so so much 

user1977

Rellen said:

Section62 said 

The first thing to do is to stop scrambling.  For most people it is difficult to make the best decisions when they feel under pressure and worried.

For example, thinking the modern auction route is a good idea is a symptom of the pressure you feel - it is easy to think that when you read the EA's blurb and it sounds like the perfect solution to the massive problem which is occupying most of your waking thoughts.

Just stop, pause for breath, then seek advice from an organisation like Shelter who can help you navigate a way through this.

Also, traditional auctions generally now don't require bidders to be in the room at a specific time/day.  The lots are advertised online in advance, some will take bids before the auction, there are options for bidding online and (which is as traditional as traditional auctions themselves) the auctioneer will usually also accept 'commission' bids.  If you read negative things about 'traditional' auctions there's a good chance they are written by people making money by promoting 'modern' auctions.  Even the choice of language (i.e. 'modern') is designed to hook people and reel them in.

Can I just ask again. Why are modern auctions so bad? Is just because of that buyers fee? What is it that makes it a bad for a seller.

Unlike a standard auction, there is no full binding contract when the hammer falls. All that happens is the buyer has paid the initial deposit in order to have the opportunity to then negotiate the "normal" contract for the purchase. They could pull out (losing only that deposit) and you wouldn't be able to do anything about it, other than watch the estate agent pocket the money and then try to find the next mug.

A standard auction involves buyers doing their due diligence in advance of bidding, so much less chance of them later discovering they can't complete - and if they do fail to complete you would at least then be able to pursue them for your costs in remarketing, any loss in value, etc.

Here's an example from a recent thread: "It is being sold by "modern auction". The estate agent said that it has already been sold 3 times since May 2022 but all sales fall through because potential buyers were not able to get a mortgage"

https://forums.moneysavingexpert.com/discussion/6418498/apartment-converted-from-offices-anything-to-be-aware-of/p1

Rellen

Annisele said:

Court proceedings don't necessarily mean you'll be evicted immediately (and usually they don't mean that). Evicted soon, yes - but not immediately. If you put the property on the market with a traditional estate agent, find a buyer in the usual way, and then in two months' time show the court that you have a sale underway, it's very unlikely that the court would order an immediate eviction. (If enough has happened for the bank to see that you're serious about selliing, it might even agree to put the possession proceedings on hold).

Also, as others have said, give Shelter a ring. You might be eligible for schemes like an assisted voluntary sale, where the lender will pause repossession action for a few months and maybe even pay some of your conveyancing fees. Or there might be some other options (but none of them will involve modern auction; that's a bad idea all around).

Thank you.

I know that I’ve got nearly 2 months until court date and even if it’s granted it’s 28 days until they take possession. 

I need to avoid court at all costs. 

I can’t risk a judge being understanding and giving more time, or take a chance on a normal market sale when so many fall through and then I’ll have even less time and options to sell. 

I need a solution so I’ve got something certain to go to mortgage company so they know there’s no need for court. 

I will definitely give shelter a call, thank you! 

RAS

Most potential buyers are put off by modern auction. People here generally recommend buyers avoid them like the plague. In your situation the buyer risks losing their fee if the property is repossessed, and the chance of getting everything including mortgage sorted in the timescale is small.

So you need a cash buyer. Go to traditional auction, with a reserve enough to cover your debts. Or price via a normal EA sale and only accept those with no house to sell. 

You'll need to line up a solicitor fast. And start looking for rentals.

Speak to the Cinnamon Trust re your moggie; they may be able to foster until you settle.

And talk to your mortgage provider.

mi-key

You still have options available. Ask a local agent about putting it on normal auction and priced for a quick sale. At least once the auction date is confirmed you can show that to the mortgage lenders. 

There are lenders out there who will also lend to people with adverse credit, and if you have a decent deposit from your equity that can help. Is worth asking a mortgage broker about it, so don't give up on that idea of being able to buy somewhere else. 

diystarter7

Hi OP

Maker bullet points re action plan and investigates pros and cons of 

Property auction, fees if/when sold and NOT sold

EA - cash buyers only, or cash buyers looking to rent it out - NB people that really want a property to bTL for cash will at times consider a contract for you to stay for a few months rent free, or rent at different levels. On of our children done that they loved the area - an apartment, seller stated they could not move for xx months due to completing contracting and then moving abroad - bought the place and the people lived there for about 70% of normal rent and moved out as agreed - kids did this as it was a lovely location and apartments were rarely up for sale - its rare but it does happen.

Sleep on it and when dealing with EA, propert auction people etc etc - NEVER sign on the dotted line the same day, sleep on it, read T&C several times, consult others if you wish and then sign - ask for opt out penanlities should you change your mind

Thnaks

Sea_Shell

Even if the OP could find a buyer who wanted it as a BTL, could they afford the open market rent?

Isn't that going to be even more expensive that what their mortgage is (was)?

They could burn through any equity pretty quickly.

diystarter7

No one said it was open market rent as per my post and depending on the price agreed, a buyer can decide how generous to be, or not to be. Until these waters are tested, The questions you raise will have been considered by a buyer as per the example I gave. It is what it is.

Rellen

Ok thank you all so much for explaining. I understand now about modern auctions. 

There’s no way I’d do it if I were a buyer either and if there’s no guarantee other than the buyer losing the fee then I’d be in trouble time wise. 

Ok so cash buyer or traditional auction it is. 

Could I ask some more advice?

so if I put on open market and stated only cash buyer / no chain. Is this through estate agents and is there a way to guarantee a timeline with this option?

 if traditional auction, how does that work? Still through estate agent or with auction house? Do I list it on right move  etc. 

also I know with auction it can go any way but generally how much more does a property go above the guide price?

thank you 

Sea_Shell

I don't think any route "guarantees" a timeline.  


Even with an auction, with a "binding" hammer price, is it still not a done deal until you actually reach exchange of contracts?