Buying my parents house - few Q's

[MX5_Nuts]

Heres how it is with us... currently living with parents searching for a house to buy (first time buyer with my partner). Parents are looking to downsize so will be selling up... House ticks every box for us so agree to buy it at market value... Once mortgage completes, parents move out as soon as they find somewhere suitable within 12 months paying no rent at all.

How can this be so bloody complicated? Why would we need to MOVE OUT and then MOVE BACK in just to complete the sale when we already live here?!

Makes no sense at all.

We'd have to look for somewhere to rent for a couple of months, which would be virtually impossible as most minimum contracts are for 12 months, and having a dog makes it even more difficult and its money wasted we cannot afford. And I presume my parents would have to do the same as they won't be allowed to be here once sale completes?

Will contact mortgage company to clear this up. If it really is this difficult then we'll have to look to buy elsewhere.

[Sarnie]

MX5_Nuts said:

Why would we need to MOVE OUT and then MOVE BACK in just to complete the sale when we already live here?!

You don't......but your parents, as the vendors, would........otherwise vacant possession couldn't be obtained.......you are better off talking to your solicitor about this as the lender will simply defer to what confirmation they receive from the solicitor...

[MX5_Nuts]

Just spoke to Nationwide explaining this and she reassured me this won't effect the application at all. Both ourselves and parents will be able to live at the property during the sale until they find a property elsewhere

[Sarnie]

MX5_Nuts said:

Just spoke to Nationwide explaining this and she reassured me this won't effect the application at all. Both ourselves and parents will be able to live at the property during the sale until they find a property elsewhere

Speak to your Solicitor........

[MX5_Nuts]

Sarnie said:

Speak to your Solicitor........

Will do once the mortgage application goes through.

[MitchT]

Sarnie said:

MX5_Nuts said:

Why would we need to MOVE OUT and then MOVE BACK in just to complete the sale when we already live here?!

You don't......but your parents, as the vendors, would........otherwise vacant possession couldn't be obtained.......you are better off talking to your solicitor about this as the lender will simply defer to what confirmation they receive from the solicitor...

Yep, that's what I was trying to understand, but it seems to be a rule for the sake of a rule that causes untold misery for the OP's parents as they'll have to move their entire existence elsewhere for the sake of vacant possession being obtained before they move back in while they find a place to buy. All the OP actually appears to be aiming to achieve is for the tenants (himself and his OH) and landlords (his parents) to swap positions. How could something so simple be made so complicated?

[Sarnie]

MX5_Nuts said:

Will do once the mortgage application goes through.

Before then........don't rely on lenders call centre staff to know what they are talking about with what is a specific conveyancing issue.........

[MX5_Nuts]

Sarnie said:

Before then........don't rely on lenders call centre staff to know what they are talking about with what is a specific conveyancing issue.........

Oh right, I'll get in touch with one shortly! I've had enough of this palava already and its not even begun yet lol

[Sarnie]

MitchT said:

Yep, that's what I was trying to understand, but it seems to be a rule for the sake of a rule that causes untold misery for the OP's parents as they'll have to move their entire existence elsewhere for the sake of vacant possession being obtained before they move back in while they find a place to buy. All the OP actually appears to be aiming to achieve is for the tenants (himself and his OH) and landlords (his parents) to swap positions. How could something so simple be made so complicated?

Because it's the law......the issue is predominantly over rights to the property Eg the transaction could go through and then the OP's parent decide that now that they have the money that they are no longer moving out, that they felt under duress to sell, sold at a lower price than they should have and go on to claim that they still have a portion of ownership of the property.....the lender would then have a property with previous tenant essentially squatting in it.....

I don't make the rules, I don't agree with a lot of them myself, I just have to work with them....

[66Elan]

Nat West agreed an application for my clients where they had been living with mother for a number of years. Mother had an interest only mortgage with no repayment vehicle and had retired. Property valued at £400,000 and Nat West agreed daughter and son-in-law, who had no deposit monies, could purchase at 'under value' for £150,000 (the maximum they could borrow) i.e. they borrowed 100% of the purchase price but only 37.5% of valuation. The only stipulation was that Nat West insisted that because mother was remaining in the house her own little kitchen had to be removed so there was only one kitchen in the property.

Edited by 66Elan on Saturday 4th February 14:49

[Sarnie]

MX5_Nuts said:

Just spoke to Nationwide explaining this and she reassured me this won't effect the application at all. Both ourselves and parents will be able to live at the property during the sale until they find a property elsewhere

OP, at the weekend I emailed my contact at Nationwide about this for you, as to me it raises concerns about whether Nationwide would be happy with this. I know you say that you called Nationwide and they said it would be ok, but the people in call centre's have no accountability and probably little knowledge of their own legal requirements and your circumstances.....

I sent the following email;

"From: [e-mail] [mailto:[e-mail]]
Sent: 04 February 2017 11:48
To: Karen Hart <[e-mail]>
Subject: Vacant possession

Karen,

I have a case where my clients are living with their parents and want to buy the house from the parent but the parents are to remain in the property, until they have found a property to buy in the future.

My concern is around “vacant possession” can you advise how Nationwide would see it please?

Regards

Liam"


And just had this back;


"From: Karen Hart [mailto:[e-mail]]
Sent: 06 February 2017 09:17
To: [e-mail]
Subject: RE: Vacant possession

Hi Liam, I am sorry but this would not meet our lending criteria. The parents would not be able to continue to live in the property.

Karen"




This is why I was concerned for you OP, hope it helps?

[thebraketester]

Whats the rational behind that?

[Du1point8]

OP... if you need to talk to a solicitor about this I know a good PHer who has worked with myself and several other Phers on house purchases.

Very knowledgeable.

[MX5_Nuts]

Sarnie - That's very thoughtful of you - thanks very much!!

I actually emailed a solicitor we dealt with in the past basically asking about this situation and this was their reply;

• ***************

Dear ..............

Thank you for your email of the 5th February 2017. Unfortunately we are not able to provide specific advice until we are instructed by clients to act on their behalf since, as you will appreciate, we need to have a full picture of the transaction and our clients’ circumstances before we are in a position to properly and fully advise.

On a general note, however, it is usual for a property to be offered with vacant possession unless it is being sold on a buy to let basis with tenants already in situ. Lenders do have differing criteria, and the scenario you describe would be considered on a case by case basis by lenders who would provide the solicitor acting for the purchaser with their specific requirements i.e what documents they may require the occupiers to sign before the transaction completes, if indeed they do not object to what is proposed.

We would not be able to act for you and your parents in the same transaction since each of you would have to have independent legal advice due to a conflict of interests.

Please feel free to contact me again by email or telephone if you would like to instruct me to act on your behalf.

Kind regards

• *****************

So basically we'll have to treat my parents house as we would buying any other house with an onward chain, meaning the sale won't complete until they've moved out and the house is empty... Is this correct?

Appreciate all of the advice so far guys I really am clueless to exactly whats involved when it comes to the legal side of buying..

[Sarnie]

MX5_Nuts said:

Sarnie - That's very thoughtful of you - thanks very much!!

I actually emailed a solicitor we dealt with in the past basically asking about this situation and this was their reply;

• ***************

Dear ..............

Thank you for your email of the 5th February 2017. Unfortunately we are not able to provide specific advice until we are instructed by clients to act on their behalf since, as you will appreciate, we need to have a full picture of the transaction and our clients’ circumstances before we are in a position to properly and fully advise.

On a general note, however, it is usual for a property to be offered with vacant possession unless it is being sold on a buy to let basis with tenants already in situ. Lenders do have differing criteria, and the scenario you describe would be considered on a case by case basis by lenders who would provide the solicitor acting for the purchaser with their specific requirements i.e what documents they may require the occupiers to sign before the transaction completes, if indeed they do not object to what is proposed.

We would not be able to act for you and your parents in the same transaction since each of you would have to have independent legal advice due to a conflict of interests.

Please feel free to contact me again by email or telephone if you would like to instruct me to act on your behalf.

Kind regards

• *****************

So basically we'll have to treat my parents house as we would buying any other house with an onward chain, meaning the sale won't complete until they've moved out and the house is empty... Is this correct?

Appreciate all of the advice so far guys I really am clueless to exactly whats involved when it comes to the legal side of buying..

No problem..............that response is a little non-committal but what he isn't saying is "don't worry it'll be fine"......he is saying that it will depend on the lender and what they require......and my contact from Nationwide has said it wouldn't be acceptable to them....

In my experience, you can never rely on the call centre people at any lender, most of them are kids or have no real idea of the legailities of what is being asked of them and will say anything to get you off the phone......I always direct confirmation from somebody who can get things done and revert to if the issue crops up further down the line......

OP, wouldn't this actually be easier if you just waited for your parents to find a place and then tie in the two transactions at that point?

[boyse7en]

Can't they sell you the house, including fixtures and fittings, "move out" for a day and then just be house guests for a few weeks? Seems a bit of a cheat, but then the rules seems a bit daft too.

[66Elan]

Or use Nat West - received this from them today:


Accept family gifted equity purchases even where the family member will remain living in the property.

[Sarnie]

66Elan said:

Or use Nat West - received this from them today:


Accept family gifted equity purchases even where the family member will remain living in the property.

It's not a gifted equity purchase............or at least the OP hasn't said it is.

[MX5_Nuts]

We'll only be paying 10K less than the actual property value - Is that enough to be classed as ''gift of equity''? The reason we wanted to sort it out now is my parents are waiting for inheritance money which is taking forever to partly fund their next home along with the sale and we wanted to speed things up by getting the sale completed beforehand and while the rates are low..!

What bks!

[66Elan]

Nat West are even more likely to accept an application if you are buying at nearly the full value. I just included their wording for the sentence 'even if family member is remaining in the property'.