Partial payment after exchange

Hoenir

From the vendors perspective riddled with potential risks and downsides.  A complete non starter of an idea. 

london.cidade

Albermarle said:

lincroft1710 said:

I doubt the vendor would agree. 


Changing the subject an 80 sq metre extension is the size of a small 3 bedroom house, so understandable if a lender declined to lend.

As above it is a very large extension. How big is the original house?

Including extension, 215 m2 sq

GDB2222

The extra £60k could be secured by a charge on the property. That would give reasonable security to the vendors. 

If the property is unmortgageable, it's really not worth what you thought it was. Cash-buyers-only properties are normally sold at a substantial discount. Are you sure you want to go ahead at £460k?

Hoenir

GDB2222 said:

The extra £60k could be secured by a charge on the property. That would give reasonable security to the vendors. 

Legally enforcing it would be extremely expensive and time consuming. The divorcing couple would still till be financially and emotionally tied for an indefinate period. 

EssexHebridean

I have to say I very much doubt that you are going to find that their solicitor will advise them to accept this idea! 

london.cidade

GDB2222 said:

The extra £60k could be secured by a charge on the property. That would give reasonable security to the vendors. 

If the property is unmortgageable, it's really not worth what you thought it was. Cash-buyers-only properties are normally sold at a substantial discount. Are you sure you want to go ahead at £460k?

How much decrease should  I negotiate? Would appreciate any inputs. Thanks

user1977

london.cidade said:

GDB2222 said:

The extra £60k could be secured by a charge on the property. That would give reasonable security to the vendors. 

If the property is unmortgageable, it's really not worth what you thought it was. Cash-buyers-only properties are normally sold at a substantial discount. Are you sure you want to go ahead at £460k?

How much decrease should  I negotiate? Would appreciate any inputs. Thanks

Have you not had your own survey? If not then might be best to get your own for a valuation (I presume the lender's valuation wouldn't have gone beyond "zero because it doesn't fit the lending criteria"). Depends how likely it is that you think you'll agree a price that you can afford.

doodling

Hi,

If you really want to do this then the most secure approach for the seller is probably a partial sale where they remain joint owners until you stump up the remaining money.  There would need to be a deed of trust setting out the ownership split (which would be them owning £60k's worth and you owning the rest) and making it clear who would pay the costs of forcing a sale (i.e. if the ownership hasn't been bought out after a year then they can force a sale at your cost) and in what circumstances.  Such an approach males it very difficult for the sellers to move on with their lives of course.

Practically almost any other approach is likely to be preferable to the above to be honest.

GDB2222

london.cidade said:

GDB2222 said:

The extra £60k could be secured by a charge on the property. That would give reasonable security to the vendors. 

If the property is unmortgageable, it's really not worth what you thought it was. Cash-buyers-only properties are normally sold at a substantial discount. Are you sure you want to go ahead at £460k?

How much decrease should  I negotiate? Would appreciate any inputs. Thanks

Look, I haven’t seen the property, but a cash buyer only discount could be 30%. 

However, as I understand it, there’s nothing fundamentally wrong with the property. It’s just that work has stopped before it’s been made habitable. So, once the work has been done the property will be mortgageable again. In those circumstances, offer what you can, say £400k, and see what happens. 

Two points worth considering:

Has all the work done so far been done properly, with planning permission and building control sign off?

Are you sure you know what it will cost you to finish the project? Most people underestimate the cost of building work. Even if you do a lot of it yourself, you don’t want to do it for nothing. So, once finished, will the house be worth a lot more than you will be spending on it? It sounds like this project has cost the sellers their marriage!