Pulling out after missives in Scotland - desperate for help.

_Penny_Dreadful

Roughdiamondscot said:

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!!)

Speak to your solicitor. I don’t know why you have no faith in them as they warned you about the risks and you pressed ahead anyway and it was you who moved the goal posts with the timeline because you are doing something foolish which is trying to buy a house in Scotland when your funds are dependent on selling a house in England. What did you expect your solicitor to do to “stand up” to the seller? The seller was prepared to withdraw from the sale completely, would you have preferred that? 

You can get bridging finance in Scotland, I’m not sure why you think otherwise. Just keep in mind that if you do go down the bridging finance route you’ll also have to fork out the LBTT ADS which is an extra 6%. You’ll be able to reclaim the ADS though if you sell the English property within 18 months of settling the purchase of the Scottish property. 

Skiddaw1

Friends of ours went down the bridging loan route when they bought in Scotland (and sold in England). Yes, it was expensive but it was realistically the only option. I think you'll just have to bite the bullet and do the same if your buyers pull out OP. I hope things work out for you. It's easy to be wise after the event and I can understand why you took the risk.

Janes888

I have used a bridging loan in scotland a few times before so as others have mentioned can be done and done quickly.  Used United trust bank last time cant remember the provider i used the time before 

carolineb5949

When I read your post I actually thought my other half had posted it as we are in such a similar position, after searching for 3 years we found our dream home on a 30 acre Scottish estate, a previous buyer pulled out last minute after stringing them along for months but they had an unrealistic deadline for us signing the missives as we have commercial and residential property to sell here in Manchester, they have already pulled out once as we could not keep to their unrealistic deadline and their solicitor was constantly pressuring ours for us to sign, luckily we found a buyer straight away (a customer) who wanted to purchase all our assets but needed to get some funding in place. The sellers of the Scottish property have put a final deadline of end of Feb for signing and will pull out indefinitely if we don't sign, our buyers here are almost there but will struggle for the end of Feb, we have already spent 20k+ in fees and don't want to lose it, we have looked at bridging loans but as myself and partner will be leaving work here and running the estate as a business (holiday cottages) we are not convinced we could afford one. I am very tempted to go ahead and sign but on reading your story........I was thinking if the UK solicitor could put something in place to our buyers like a promise to buy in that if they pull out they foot all the legal costs that signing the missives would bring but not sure if that would be legal, of course the other complication is that we have an entry date of 2 months after the missives are signed and if our buyers sign a contract now will that not mean they will expect immediate entry take over here as they will then be paying loan interest, impossible for us as we need the income until we move and we have 6 dogs, the only thing I would suggest for you (sorry to tell my story first) is to extend the entry date if possible as the money changes hands then and perhaps your buyer will have funding by then or someone else will want to purchase, think I would do this over starting to negotiate the costs now.

_Penny_Dreadful

carolineb5949 said:

When I read your post I actually thought my other half had posted it as we are in such a similar position, after searching for 3 years we found our dream home on a 30 acre Scottish estate, a previous buyer pulled out last minute after stringing them along for months but they had an unrealistic deadline for us signing the missives as we have commercial and residential property to sell here in Manchester, they have already pulled out once as we could not keep to their unrealistic deadline and their solicitor was constantly pressuring ours for us to sign, luckily we found a buyer straight away (a customer) who wanted to purchase all our assets but needed to get some funding in place. The sellers of the Scottish property have put a final deadline of end of Feb for signing and will pull out indefinitely if we don't sign, our buyers here are almost there but will struggle for the end of Feb, we have already spent 20k+ in fees and don't want to lose it, we have looked at bridging loans but as myself and partner will be leaving work here and running the estate as a business (holiday cottages) we are not convinced we could afford one. I am very tempted to go ahead and sign but on reading your story........I was thinking if the UK solicitor could put something in place to our buyers like a promise to buy in that if they pull out they foot all the legal costs that signing the missives would bring but not sure if that would be legal, of course the other complication is that we have an entry date of 2 months after the missives are signed and if our buyers sign a contract now will that not mean they will expect immediate entry take over here as they will then be paying loan interest, impossible for us as we need the income until we move and we have 6 dogs, the only thing I would suggest for you (sorry to tell my story first) is to extend the entry date if possible as the money changes hands then and perhaps your buyer will have funding by then or someone else will want to purchase, think I would do this over starting to negotiate the costs now.

It's you who has the unrealistic deadline.  Buying and selling in Scotland happens much faster than it does in England.  It's never taken me more than 8 weeks from making an offer to getting the keys.  When you made an offer on the estate you were not in a position to proceed if your finances were dependent on the sale of not one property in England but multiple properties in England.

Absolutely no way as a seller in Scotland would I sign something to foot your legal bills if you had been foolish enough to make an offer on my property where you are dependent on selling a property(s) in England to fund your purchase.  That is your risk to take, not mine.

theartfullodger

.......

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......

Not necessarily: If you've been paying rent (or providing things of value e.g. redecoration or repairs for owners - thus "moneys' worth") then you are tenants and the new owners, even if sitting outside with a huge removals van & 3 screaming kids don't have a right to move in, they just simply become your new landlords... (Think in started with the scots "Leases Act 1449".)

see..
https://en.wikipedia.org/wiki/Leases_Act_1449

Appreciate this may cause unwanted family arguments. 

Were you served any formal "Notice to leave" by the current owners?? 
see.
https://www.mygov.scot/tell-your-tenant-they-need-to-leave

Artful: Was landlord in Scotland for over 20 years..