Assignment of Contract Advice

Ukshoegal

We are in the process of trying to buy a property. All was going really well. We went to see the house on 15th August. Fell in love and put offer in on 16th which was accepted. We had been made aware by the estate agent that the house was vacant and seller wanted a quick sale as she had bought property in poor state, refurbished it and was now selling on so wanted money back quickly. We applied for mortgage and was accepted on 5th September with Natwest through a broker. Quickly after this our solicitor got to work and made contact with seller’s solicitor. It was at this point the sellers solicitor requested to do an "assignment of contract" rather than a normal sale. Our solicitor is doubtful our lender will agree to this. However, as our seller is yet to complete with the original vendor, I believe the alternative would be having to wait 6 months due to the 6 month lending rule? 

The estate agent has today informed us that if the seller hasn't completed with original vendor by end of October, they will have to pay a penalty and result in them needing a mortgage themselves which will hold things up further. 

This all seems very strange to me and we are struggling to understand what is going on. And ideas would be appreciated?

user1977

NatWest's policy doesn't state that they won't consider it:

https://lendershandbook.ukfinance.org.uk/lenders-handbook/englandandwales/national-westminster-bank-plc/#C9130

So has anybody asked them?

Ukshoegal

user1977 said:

So has anybody asked them?

Thanks for this. 

Yes our solicitor has asked Natwest last week and we are awaiting a response. Hopefully we won't have to wait too much longer 

eddddy

That's a very strange set up.  Do you know the back-story of why this is being done?

Is there something like a "we buy any house" company involved?

I'm not sure there's anything you can do if you can't find a mainstream lender - except maybe go to a sub-prime mortgage lender who will accept an assigned contract - but then I suspect the mortgage will be much more expensive.


Are you buying through an estate agent? It's inexplicable that the estate agent didn't tell you at the outset about this situation.

Either the estate agent is thoroughly incompetent, or a complete fool, (or maybe a rogue). 


Tbh, unless there is some other relevant info that you haven't mentioned - if you can't get a mortgage, I'd be considering a complaint to the estate agent's redress scheme, to get compensation for lost legal fees and mortgage application fees.


 

saajan_12

Sounds like A owned the property and agreed to sell to B, who wants to sell to you (C). 
The suggestion is to amend the first sale so that A sells to C. If there's a difference in the sale prices, you might pay that to B. 

Inherently nothing wrong with the set up, this might happen if B bought off plan, or some sort of webuyanyhouse company, or part exchange company etc.

This might mean you have more negotiating power if you find out what time pressure B is under and what their profit margin is. However that depends on how keen you are too.  Do check if your lender and solicitor will accept it. 

Ukshoegal

No it isn't a "we buy any house" scenario but I do believe the seller is in cahoots in some way with the original vendor (some sort of profit sharing scheme where seller has exchanged contracts and paid a small deposit, got keys, done work on property but never planned on completing until we do, and then seller pays original vendor out of our money meaning they have never actually had an outlay other than the deposit and building costs) This is all from detective work I have undertaken and nothing concrete that I have been told. I think it must be some sort of property flipping short-cut. 

I do feel very misled and that full disclosure should have been given from the outset. If it had we probably wouldn't have let ourselves be drawn in and would have given it a wide berth. 

As it is now, we are too invested and so are hoping the sale can be rescued 

silvercar

Ukshoegal said:

I do feel very misled and that full disclosure should have been given from the outset. If it had we probably wouldn't have let ourselves be drawn in and would have given it a wide berth. 

As it is now, we are too invested and so are hoping the sale can be rescued 

which is exactly why they didn't tell you.

eddddy

Ukshoegal said:

No it isn't a "we buy any house" scenario but I do believe the seller is in cahoots in some way with the original vendor (some sort of profit sharing scheme where seller has exchanged contracts and paid a small deposit, got keys, done work on property but never planned on completing until we do, and then seller pays original vendor out of our money meaning they have never actually had an outlay other than the deposit and building costs) 

If the "current owner" and "your seller" were 'in cahoots' (or they're 'friends') - they could agree to cancel their contract.

Then the "current owner" could simply sell the property to you - and the problems disappear.

So I think it's more likely that "your seller" is making a chunk of money on the deal - and maybe "your seller" doesn't want the "current owner" to know how much.


(Like with a "we buy any house" company that wouldn't want the current owner to know how much 'profit' they're making on the transaction..)