Pulling out after missives in Scotland - desperate for help.

Roughdiamondscot

I know that many people’s first reaction on reading this is going to be those two are incredibly stupid but despite that, any advice gratefully received! We might have to pull out of a house we’re buying after signing missives (even though we really don’t want to!) 

This is a long and involved story but the bare facts are – we have signed missives on a house purchase in Scotland and we may not be able to pay the balance in time and may have to pull out of the sale even though we don’t want to.

The background is:

We live in a property belonging to family and it has been sold, its new owners take possession on the 20th of this month, and we need to move out.

We own a house in England which we have sold to use as equity to purchase a house in Scotland, where we now live, and have a mortgage in place to buy the house I mention above, that we’ve signed the missives of.

The sellers of the house we’re buying began putting us under more and more pressure just after Christmas. We can see it from both sides, but it seemed to be they had suddenly gotten an impression (very wrong!) that we weren’t serious about the purchase any more and when we mentioned that we might need more time than our original completion date in mid feb, they instructed their solicitor to say no and to pull out that day.  When our solicitor pointed out that we already had a timeline that they had agreed to, they said they would keep going with the sale but we had to sign missives by midday yesterday.  We knew it was a risk, but we had accepted an offer on the England house.  All the searches on that house had come back, we knew the buyer had his mortgage in place and that he had a considerable cash deposit, and before signing the missives we did our absolute best to ascertain from his solicitors that all was on track.  We did ask whether he would be able to exchange that day but they said no, but that he had the contracts and everything was ready.  We had been advised by our solicitor in England not to put too much pressure on, because due to the different systems we could come across as trying to do something dodgy or fraudulent.  We had this deadline of midday yesterday and although we knew it was a real risk, we felt we had no option but to sign the missives and we also felt that our solicitor here in Scotland had not done a good enough job of ‘standing up’ to our seller’s solicitors.  We live in a small neighbourhood and not many houses come up in our price range, and it wouldn’t completely surprise me if our sellers had received another unofficial offer on the grapevine.  I should add though that our solicitor in Scotland was very clear about what a risk signing the missives could be, but we felt we had to. 

So here comes the bit where we were very stupid – despite feeling we’d done our best to find out that the English house sale was still going ahead, an hour after we signed the missives some very different messages started coming through from the buyer – that they wanted another survey, that they were worried about a couple of different aspects of the sale.  The English house sale was due to exchange and complete today, but that hasn’t happened, and the buyer may well pull out.   

So my question is – if the house doesn’t sell and we don’t have funds and can’t complete, does anyone have any advice or guidance about what we can do?  We desperately want to buy the house in Scotland that we’ve signed the missives on. The amount of our mortgage is tied to the price of that house, so any of the ‘quick sale – we buy any house’ type companies won’t work.  What I would love advice on is: we are liable to pay the seller costs and they can be quite high – it can either by 4% interest on the agreed price of the house for as much as a year (!) or their legal costs, their estate agent costs, and the difference between another sale price if they resell it for a lower price.  Is there a way that we can negotiate these costs or try to mitigate them? Would it make sense to have our solicitor (or probably find another solicitor) to make an offer in advance? It seems to be that the seller can rescind the missives but that they can only do that 14 days after the initial agreed payment date has passed, and is it in the seller’s power to wait longer to rescind if they want to? (not that they would!!)

We’ll have to find somewhere new to rent (again, very little in our area that is affordable) and it could take months to find another suitable house to buy near kids’ schools etc.  The irony is that we are sure the house in England will sell at some point and it could be that by the time this house in question is remarketed, we’d be in a position to actually buy it because of the house selling and our mortgage in hand.  The sellers though would not even entertain us buying it, I feel certain.

Appreciate this is now long, rambling, and potentially difficult to understand. But any or all suggestions or stories of similar experiences would be so welcomed.  We are both feeling extremely extremely anxious (again, I know it’s self inflicted!!)

user1977

Roughdiamondscot said:

I should add though that our solicitor in Scotland was very clear about what a risk signing the missives could be

So why aren't you asking them for advice about what to do now?

loubel

I'm not sure what help we can give you other than to speak to your Scottish solicitor asap to let them know that you might not have the funds and speak to your English solicitor and estate agent to see if they can find out what's going on with your buyer. Have they actually pulled out or just not ready yet?

silvercar

A bridging loan is the usual solution to these issues. 

Roughdiamondscot

silvercar said:

A bridging loan is the usual solution to these issues. 

Bridging loans don’t really seem to be an option in Scotland - i don’t know a great deal about it but I have googled and called a dozen and they all can’t do residential or can’t do Scotland. 

Roughdiamondscot

user1977 said:

Roughdiamondscot said:

I should add though that our solicitor in Scotland was very clear about what a risk signing the missives could be

So why aren't you asking them for advice about what to do now?

That’s a very good q. We don’t have a huge amount of confidence in our solicitor - I guess what I was hoping was that someone had experience or more specific knowledge (our solicitor said in passing they’d never had anyone sign missives without funds) of what options were and then I’d go to him with that eg ‘we’ll pay x’ or ‘we’d like to go about it this way’ 

Roughdiamondscot

loubel said:

I'm not sure what help we can give you other than to speak to your Scottish solicitor asap to let them know that you might not have the funds and speak to your English solicitor and estate agent to see if they can find out what's going on with your buyer. Have they actually pulled out or just not ready yet?

The buyer has just gone completely quiet and isn’t giving our solicitor an answer so we haven’t had confirmation either way just yet 

sheramber

Did you contact a Scottish lender?

Ask your solicitor about a bridging loan.

When we needed one our solicitor arranged it.

MeteredOut

Sorry to be blunt, isn't it as simple as you either

1) find the funds (you need to talk to your solicitor or someone else about a bridging loan; saying they "don't really seem to be a option in Scotland" indicates you need to be taking this option more seriously when a simple google gives this link: https://www.cliftonpf.co.uk/blog/02012018171808-how-to-get-a-bridging-loan-in-scotland/), or

2) you pull out and you've left yourself open to being sued for losses by the seller. Those losses could be fees they've incurred and/or any reduced price they may have to subsequently accept for the house you committed to purchase. ie. we could be taking 10s of £1000s.

user1977

If you know you are definitely not going to be settling on time, it may be a good idea to put your sellers on notice, in case that assists them in mitigating their costs.

Whether there's much point negotiating a settlement now probably depends on the market - if they think they can readily re-sell the property (maybe even at a better price!) then they'll probably be more amenable to letting you go in exchange for a fixed sum.

Flugelhorn

oh no this is really difficult -   @MeteredOut is right you really do need to get a bridging loan, if the buyers pull out it could be months before you sell and the bill to the vendors could be huge if you don't complete the purchase. 

bit surprised solicitor didn't want to be sure that the funds were in place before missives