Interesting house purchase issues

[MrChips]

Apologies for a boringly mild rant!

I thought i'd share my current house purchase situation in the hope that either people may have some useful advice on how to handle it, or share some even worse so that I can cheer up and not get so stressed about it!

We had our asking price offer accepted on a large 4bed in April. The house was empty as the guy living there had passed away the previous November.
We were told in May that the vendor had applied for probate, and from my own experiences this should mean that 8-10 weeks later, there would be nothing stopping exchange. We're keeping our old 2bed house and rented it out so mid-July we advertised, with start of September availability. 11 viewings and 10 offers and we had found some decent tenants, and the plan was to look to complete on the new house in mid August, and have our tenants in at start of Sept.

Despite chasing the estate agent for news on the vendors probate, nothing was forthcoming. In mid August a concerted effort from ourselves and our own solicitor drew out the fact that they had only just applied for their probate! So there was no way we were going to move in. We offered to rent it from them and it was declined.

We decided to move into the in-laws so as not to lose our tenants, and on the day of moving we had news that the vendors had changed their mind, and we could in fact rent the house until they were in a position to complete. Perfect! A bit of moving stuff around, a week or so with the in-laws and we'd be in!
Nope.. it took them over 5 weeks to draw up a rental contract, and only when we started getting stty with them, we managed to get it all signed and we moved into the new house as tenants at the start of October.

Mortgage offers (BTL on our old place, and new mortgage on the new place) had to be extended twice, and currently have expiry dates next week.

Today I receive news via the selling agent that he's spoken to the probate solicitor, and she was very dismissive, mumbled something about the deceased business still needing valuation, which in turn makes us wonder if she's actually applied for probate. He claims he can't get a straight answer from them!

So, we're now living in the new house, as tenants. Mortgage offers will probably lapse, and rates available now are higher which would make it unaffordable. The house is probably worth 30k more now than what our offer was accepted at.

So our options seem to be:
- Chill and just wait for news of their probate, let the mortgage offers lapse if necessary, but prepare for needing to ask for a price reduction if the new mortgage rates are higher, i.e. don't show our hand, and only deal with the money issues if/when they arise.

- Point out the fact that we're losing around £1k a month in equity payments because we're paying rent rather than owning the house, so laying it clear that if we are delayed longer, then we want this loss covered.

- Chill, wait for their probate and just do whatever's necessary, knowing that the equity in the house has grown a decent amount.

We don't want to lose the house so personally I think I should go with the first choice, but they have mucked us around so much over miscommunication, this is just another level. Surely a solicitor can't say "yes we've applied for probate" if they haven't! Our impression from the agent is that vendor (deceased's sister) and the executor of the will, and the agent himself, are all struggling with the probate solicitor, so even they can't get straight answers!

Anyone share any worse/more weird experiences?

[MrChips]

Still no news from their solicitor, and we've just realised that the effective landlords (their solicitor) have not provided details of our deposit protection scheme. It seems that both the agent, the vendor, and the executor of their will are all pissed off with the solicitor who is meant to be applying for probate, but none of them are able to get any info out of them, nor have the balls to just transfer the business to another solicitor so it can actually start moving again.

Downside now is that we're left paying rent, instead of a mortgage which would be paying off equity over £1k a month, and if the rates go up then the mortgage will be a bit too unaffordable, so we'd need to reduce the purchase price. I doubt they'd accept that as the house value has definitely increased but that doesn't improve our ability to pay the mortgage, Grrrrrrrr

[MrChips]

Mallinson1984 said:

I would think twice about entering in to any financial commitment that could become unaffordable when the rates rise, which I believe they will in the new year. Procede with caution OP...

You'll have to trust me when I say i've done the figures and they work. The mortgage is do-able as we're looking for fixing for 5yrs. Equity paid off would be over 60k over that five years, which means the rates could go to 5-6% before it would be tight. The old house still retains over 80k equity which we can use as a last resort in the future should rates rise above 6-7% in the next 5yrs. As always though.. it's most unaffordable at the start of the mortgage, but it almost always makes sense to stretch yourself financially at the start.

The neighbours house (identical but smaller plot and less parking) sold in June for 30k more and exchanged recently. However from what we know of the vendor, it's the deceased's sister, who is not moving house and from what we've been told, wants the sale completed just as much as we do.

The whole rental thing is a joke, as there's no inventory been made and agreed, along with the lack of info on the dps scheme. Considering it's a solicitor firm that is the named landlord then that's quite astonishing, however we are well aware that had we not pushed to be in as tenants, then i suspect the house would have been pulled from the market and put back on later.

Having been through probate myself twice in 2yrs, I know how complicated it can all be, so if it is their solicitor and not the vendor that is the issue then the vendor has my sympathy. However we should not have been told twice now that probate has been applied for, and then it turns out to be a lie.

Our solicitor (who i do trust) is suggesting the best plan at the moment is unfortunately just to keep pressuring the estate agent to push for their probate application. If we start talking about money/costs incurred now, then it gives them more opportunity to cancel the deal, serve us notice and get us out before they are even able to exchange.

However I think going to go see him tomorrow to discuss whether there are any options to protect ourselves. Maybe we suggest that we give them a deadline to submit the probate, and state that any rent paid after that deadline, would be paid as part of the purchase price of the house. They don't lose anything, but stop gaining £1k a month from us without any penalty?
Or should we suggest that rent is reduced to zero?

The alternative i guess is to just be patient, play nice, go along with the current status quo, and wait until everyone is ready to exchange and then ask for a price reduction, even if it's just by however much rent we've paid up until then. Not very moral, but i guess more chance of succeeding than raising all the financial issues now?

Oh and just to clarify how complicated this whole thing is, there are so many parties involved:
- Vendors conveyancing solicitor - local firm
- Vendor (deceaseds sister)- who didn't have the right to put the house up for sale in the first place (but this is to our advantage)
- Executor (deceaseds accountant) - I prsume they're taking a fee from the estate but seems to have no interest in pushing it through.
- Probate solicitor (and landlord) - employed by the executor to prepare the probate submission but is a different solicitor to that dealing with the conveyancing on their part.

So it seems that even my solicitor doesn't have direct contact with their probate solicitor in order to put some pressure on or at least get some specific answers.

Good shout on the SRA and LO. I think i'll keep them in mind should it come to it, but will see if my solicitor can draft a complaint against the probate firm and put something in place to give them a kick up the backside to get them in gear.

Edited by MrChips on Sunday 29th November 12:26

[MrChips]

Murph7355 said:

You seem to have let heart rule head on this one and have very few/none of the cards left in the arrangement/negotiations.

You either need to regain some position or accept that you could be in your compromised position for some time.

Allowing frustration to take hold will just make your position worse. You need to think of alternative strategies I suspect.

IMO always approach probate sales cautiously. There's so much potential for delay and argument on the vendor side that what looks simple could easily become very messy. In moving into the house on a rental basis you've simply given the vendor no reason at all to hustle and get things sorted. You may also have given them a very good reason not to move ahead any time soon.

I also don't understand your position on the mortgage front (unless it's frustration boiling over). In one post you say it will become unaffordable. Then you go to lengths to explain why it would be. If you're entering into a negotiation with the seller do not let this (or anything else) enter the debate unless you have your story straight.

If I were you I'd be looking for somewhere else to live temporarily and hand rental notice in. I would also be looking round the housing market for an alternative place to buy. I would then use both of these items to chivvy along the seller - if they're not intending to mess you about for the foreseeable, they'll start to pull their finger out. Conversely you'll have started to get your head round to that maybe not being your next home. Either way, you're regaining position. Nothing to stop you stating your offer stands, you're really keen to proceed with the sale etc but that you need to move on and settle into your new home properly and the current position isn't allowing that...

I'm seeing it almost opposite to you at the moment. Surely by giving notice, and moving out, we're sending them a message that they'd be better off taking it off the market rather than continue with us as buyers at the agreed price?

I would think that us having moved into the house already is actually in our favour. . Looking at it from their view, by pulling out now, they would not only lose a buyer, if they are decent people then they will find this decision more difficult to go through with than if we weren't in the house. Also they leave themselves open to massive complications if we chose not to leave quickly. The lack of any inventory means for all they know, we have painted the walls lime green and they'd need to do loads of work once we were out to get the house sellable again!

On the mortgage front, for me "affordability" is simply about the monthly mortgage payments and doesn't really have much bearing on the house price/equity. If the rates go up soon, just as we're taking the biggest mortgage we're likely to take, then the monthly payments start to become too much to break even. It doesn't make any difference to the affordability if the house is now worth X amount more.

I do take the point about the amount the rent is costing us vs the house value, so yes we're losing 1k of equity a month that we could be paying off the mortgage, but the house is gaining more than that a month. However the difference is that paying off the mortgage benefits us directly immediately and even whilst we own the house, the latter is only good to us if/when we come to sell.

It's a risk whichever way we turn - Start pushing their solicitors and we risk them thinking they'd be better getting us out now as they can't complete anyway, or keep quiet and we risk they chose to do something like raise the price at a later date so it looks like the only route to us regaining some control is to stop thinking that we can buy this house, and instead start thinking that we need to find something else (won't be easy to do this).

We have kept an eye out since finding this house, and only 2 have come up that we would consider but both went on day one. At worst I think we should now start viewing more houses as they come up.

[MrChips]

We're still plodding along with this.. Sellers are awaiting IHT receipt (so we're told). BTL mortgage offer ends on 14th March.
New mortgage for the new house couldn't be extended any further so we've lost some of those fees. To add to that, the lender will now only lend £5k less than the previous offer as their criteria has changed.
We scoured the market and found another lender but they declined the mortgage as my wife defaulted on a store card in late 2010, with the sum total of £34 on it. She can't remember anything at the time but despite appeals to their business manager apparently they won't overturn underwriters decisions if it's been made because of a credit default, no matter how small.

So we're now back applying to the original lender, but for £5k less. Once we have an actual offer from them then we'll consider how/who should cover this.

Oh, and if we're not completed by April then stamp duty goes up £17k as we're not selling the old house. It's unlikely we could even sell it as an option now as we have tenants in place with no break clause until September.
I've spelt out to the agents that if they delay it beyond April then the vendor needs to cover the 17k as we simply don't have access to it.

The beneficiary of the will is the guys sister, single, with no other relatives in the Will. The executor (who should be calling the shots but isn't) is the guys accountant so doesn't stand to benefit from trying to remarket.

Saga continues but we're just gonna carry on and see how it plays out. Chase the agent and solicitors every couple of days and what will be will be.

Sad to put an emotional spin on it, but we had been searching for a house for 5months, with my mum offering to fund it due to terminal cancer. The day after we had our offer accepted, my mum passed away which made my brain think that we should do whatever we could do secure this one... Sentimental nonsense really but feelings which are hard to ignore.

[MrChips]

TA14 said:

Wow! So in April they sell to you at £60K below market value or in May they have to lower it to £82K below market value; I know there's hard bargaining but I fear that you may be pushing this one too far. Good luck.

Kind of but if at the point of exchange, everyone suddenly relooked at what they think market value is, then no one would ever move!

I do however agree though that it's about 99% likely be a step too far for any sane person to agree to. If it ever gets to that stage, i'm hoping they basically don't "need" the money and just want the house gone, and that the risk of another buyer at a higher price suddenly dropping their offer down just before exchange would be a risk they just don't want.

Push comes to shove, our only option would be try to borrow off family on the promise that we sell house 2 within 18 months as HMRC are preposing a refund of the extra stamp duty if you do so, so we'd get the 17k back.

Life's a journey etc

We have been looking elsewhere actively now for 8 weeks or so, and currently zero have been of interest, including those we've viewed, hence we'll plod on for a bit longer. Both solicitors are saying that probate should be possible within the next 4 weeks so we're pinning our hopes on that.
Sadly the current new house +£17k is still good value compared to what else is available.

Edited by MrChips on Thursday 21st January 21:42

[MrChips]

JacquesMesrine said:

I don't understand the first paragraph around mortgage payments and equity. Assuming rates stay the same then your payment would stay the same for the whole of the mortgage term too. Monthly payments don't reduce over time, so the equity comment is a red herring.

Also astounded that a house worth c£565000 agreed purchase price can be rising at 10% per annum. Where the hell is it?

Should have mentioned that i'm young enough to extend the mortgage term back up to the original number of years if i did ever need to reduce the monthly payments (i know this isn't good financial sense, but it is an option).

I was going to update this thread anyway, moreso just with the fact that there's still no sign of the IHT receipt (vendors solicitors claim they sent it off the payment/forms on the 2nd Dec).

We have had the discussion with them about the extra costs we've incurred, but as we suspected, they wouldn't offer anything back. They have however committed to keeping the price the same and seeing it through to the end so i guess that gives us some reassurance that they don't plan on hiking the price. I think we've realised that we both see a notional loss caused by the length of time it's taken, so we're both going to have to suck it up.

It's all getting a bit squeakybum time as it draws closer to the stamp duty changes in April. If the worst happens and it goes beyond April, then so long as I can find £17k from somewhere, then we'll still go through with the purchase and will just have to sell the old house fairly soon after. Having checked out prices for our 2bed, I think we will also see around an extra 20% compared to 12 months ago which again is pretty crazy!!

The area is south of Reading, so there's a little bit of a market push with CrossRail coming this way, but also 3,500 new homes being built within the 3 villages, so a lot of uncertainty. www.southofm4.com shows the scale of some of the new builds. Both our old and new house are in this area.

[MrChips]

It's all kicking off
Last email we had was 13 working days ago stating that they would submit their probate application within 5-7 working days.
Solicitor that was dealing with their probate has left the firm, found out today it's been passed to another solicitor but neither my own solicitor, nor the selling agent can get hold of her.

Apart from ringing the firm and speaking to the highest ranking person i can get through to, any suggestions on getting it escalated as for the past 2 weeks they have not returned any phone calls or emails (which is totally unprofessional irrespective of whether they have or haven't made any progress). I'll speak to my own solicitor in the morning but there must be a method of somehow forcing at least an answer out of them, or maybe it's come down to me having to just pay them a visit in person and make a nuisance of myself?

I suspect complaining to the ombudsman is pointless as our issue is with their solicitor, who we haven't got any contract or agreement with, so there's no grounds to complain formally?

Fun... and games

[MrChips]

We've completed with 1 day to spare before the new stamp duty. I can honestly say i've never been so nervous in my entire life but glad it's all over.

Just the small matter of getting our rental deposit back (unprotected as well, tts!). I've read that the could be forced to pay up to 3x the deposit as compensation but i just want the last bit over so let's hope they just send a cheque soon.