Advice required re house purchase

[robsco]

Hi all,

Hoping for some advice if we may. Please bear with me as we have never been in a chain before, and so much of what I am told by solicitors and estate agents makes no sense to me. The very short story... we purchased a house around 20th May, found our dream home and had an offer accepted. This caught us so off guard that we hadn't even marketed our house by the point the offer was accepted. By the 23rd, we had marketed ours and by the 25th May it was sold STC.

We accepted the first offer on our property as the buyer was purchasing as a BTL, we assumed this was the wise way to go as there was no chain. Fast forward two months and we have had several issues with the sale of our property. Firstly the survey carried out had the property down as a flat (it is a detached coach house, with garage and driveway). This took nearly three weeks to rectify. This has just been sorted but now we are told that the lender has down valued the rental figure, which I need explaining? How does the rental figure marry up to the borrowing, how is this calculated?

My questions, which I would love to ask the estate agent but don't feel I can:

- Does this mean there is in effect NO firm mortgage offer after 2 months?
- If so, is it an acceptable time frame to still be waiting for a BTL mortgage offer, after 8 weeks?
- What are the chances that any appeal will even be considered?
- Is it time to cut and run from this deal and try to re-sell, or is this just standard industry practice that everything seems to be riddled with complication?
- We also have had no enquiries from the buyer's solicitor, this dates back to the 1st June. Again, is this in anyway acceptable, is it likely that the buyer has instructed his solicitor not to start any work until the mortgage offer is in place?

Apologies if any of these questions appear daft, but I find the whole process to be incredibly difficult to follow, having no previous experience of how these things operate, and no knowledge whatsoever of the jargon. We are happy to sit tight and wait but we are beginning to get the impression from the seller of our new house that they are beginning to show signs of frustration, and I am at a loss as to how to respond from here.

Thanks in advance, Rob.

[Sarnie]

robsco said:

Hi all,

Hoping for some advice if we may. Please bear with me as we have never been in a chain before, and so much of what I am told by solicitors and estate agents makes no sense to me. The very short story... we purchased a house around 20th May, found our dream home and had an offer accepted. This caught us so off guard that we hadn't even marketed our house by the point the offer was accepted. By the 23rd, we had marketed ours and by the 25th May it was sold STC.

We accepted the first offer on our property as the buyer was purchasing as a BTL, we assumed this was the wise way to go as there was no chain. Fast forward two months and we have had several issues with the sale of our property. Firstly the survey carried out had the property down as a flat (it is a detached coach house, with garage and driveway). This took nearly three weeks to rectify. This has just been sorted but now we are told that the lender has down valued the rental figure, which I need explaining? How does the rental figure marry up to the borrowing, how is this calculated?

My questions, which I would love to ask the estate agent but don't feel I can:

- Does this mean there is in effect NO firm mortgage offer after 2 months?
- If so, is it an acceptable time frame to still be waiting for a BTL mortgage offer, after 8 weeks?
- What are the chances that any appeal will even be considered?
- Is it time to cut and run from this deal and try to re-sell, or is this just standard industry practice that everything seems to be riddled with complication?
- We also have had no enquiries from the buyer's solicitor, this dates back to the 1st June. Again, is this in anyway acceptable, is it likely that the buyer has instructed his solicitor not to start any work until the mortgage offer is in place?

Apologies if any of these questions appear daft, but I find the whole process to be incredibly difficult to follow, having no previous experience of how these things operate, and no knowledge whatsoever of the jargon. We are happy to sit tight and wait but we are beginning to get the impression from the seller of our new house that they are beginning to show signs of frustration, and I am at a loss as to how to respond from here.

Thanks in advance, Rob.

If your buyer is buying your property as a BTL then the rental of the value has to be sufficient for the buyers mortgage company to lend the amount they have applied for.

Other queries;

- Looks that way
- Things are slow currently but it would be getting to the time that you need to start applying pressure to your buyer.
- Unlikely, in my experience
- Sounds like the buyer didn't want to incur any solicitors costs until they had an offer, not the sign of a committed buyer.

Using a good mortgage broker would have helped you understand a lot of the jargon and process.

Your Estate Agent needs a rocket up their backside. They need to earn their money and get this sorted. I'm not sure why you would be afraid to talk to them......YOU are paying them to not get your property sold currently.......

Personally, I'd probably give the buyer another week or two then get rid of them.......

[LooneyTunes]

It doesn’t sound like the buyer has their ducks in a row and/or had done much to progress the purchase but to,give the benefit of the doubt it is possible that they’re waiting on searches before seeing over inquiries.

A good estate agency will have someone tasked with monitoring the progressionof every sale. You should speak them to find out how things are progressing from their perspective. Remember they work for you, usually only get paid when it goes through, and will need to put in a lot more work if the transaction falls apart.

Don’t be afraid to ask what can feel like awkward questions (e.g. can/will they proceed given the down valuation) to help apply a bit of pressure and/or help you understand the situation. Although it’s your home, put emotion to mine side and treat it as a business transaction.

The thing with BTL buyers is that there are different types and less emotion involved. Someone reliant on a mortgage at x% LTV is a very different proposition to someone who can buy outright, forgoing surveys/valuations etc. It sounds like you’re more towards the former than the latter, so asking a few questions via your agent may well be sensible.

The key thing is always to be reasonable and seek to understand first rather than accuse them of inaction. Without the emotion associated with a new home it can be easier for a BTL purchaser to walk away if you escalate things too far/too fast.

[bennno]

robsco said:

Hi all,

Hoping for some advice if we may. Please bear with me as we have never been in a chain before, and so much of what I am told by solicitors and estate agents makes no sense to me. The very short story... we purchased a house around 20th May, found our dream home and had an offer accepted. This caught us so off guard that we hadn't even marketed our house by the point the offer was accepted. By the 23rd, we had marketed ours and by the 25th May it was sold STC.

We accepted the first offer on our property as the buyer was purchasing as a BTL, we assumed this was the wise way to go as there was no chain. Fast forward two months and we have had several issues with the sale of our property. Firstly the survey carried out had the property down as a flat (it is a detached coach house, with garage and driveway). This took nearly three weeks to rectify. This has just been sorted but now we are told that the lender has down valued the rental figure, which I need explaining? How does the rental figure marry up to the borrowing, how is this calculated?

My questions, which I would love to ask the estate agent but don't feel I can:

- Does this mean there is in effect NO firm mortgage offer after 2 months?
- If so, is it an acceptable time frame to still be waiting for a BTL mortgage offer, after 8 weeks?
- What are the chances that any appeal will even be considered?
- Is it time to cut and run from this deal and try to re-sell, or is this just standard industry practice that everything seems to be riddled with complication?
- We also have had no enquiries from the buyer's solicitor, this dates back to the 1st June. Again, is this in anyway acceptable, is it likely that the buyer has instructed his solicitor not to start any work until the mortgage offer is in place?

Apologies if any of these questions appear daft, but I find the whole process to be incredibly difficult to follow, having no previous experience of how these things operate, and no knowledge whatsoever of the jargon. We are happy to sit tight and wait but we are beginning to get the impression from the seller of our new house that they are beginning to show signs of frustration, and I am at a loss as to how to respond from here.

Thanks in advance, Rob.

You are paying an agent to sell your house, make them work for it. Ask your agent to chase this up. Selling and buying takes 16-20 weeks min.

Agents have a nominated staff member person who drives conveyancing

Does the buyer still want it and will the mortgage company fund ‘them’ despite the rental value adjustment.

Do they have searches back and have all your forms been transferred. .

Where is the buyer in the process, have solicitors details been provided to your solicitor

[superlightr]

let me guess - OP did you use Purblepricks?

[ooid]

How does the rental figure marry up to the borrowing, how is this calculated?

In addition to what Sarnie says, Banks run stress tests regularly on BTL applications. Loads of parameters involved, market conditions, local area, etc…

[superlightr]

ooid said:

How does the rental figure marry up to the borrowing, how is this calculated?

In addition to what Sarnie says, Banks run stress tests regularly on BTL applications. Loads of parameters involved, market conditions, local area, etc…

they are often way out and most likely will be guessing. We as letting agent are asked to give a rental valuation for some our our new landlords when the mortg co have "undervauled" a property.

The undervaluation is a guess from the mort co at best and if they had done ANY real research they would see they are way off the true figure from our experience. We have helped get these overturned.

[Killer2005]

superlightr said:

they are often way out and most likely will be guessing. We as letting agent are asked to give a rental valuation for some our our new landlords when the mortg co have "undervauled" a property.

The undervaluation is a guess from the mort co at best and if they had done ANY real research they would see they are way off the true figure from our experience. We have helped get these overturned.

Well that's completely incorrect. They take comparable information from Rightmove Plus in addition with some local knowledge to get their figures.

[superlightr]

Killer2005 said:

superlightr said:

they are often way out and most likely will be guessing. We as letting agent are asked to give a rental valuation for some our our new landlords when the mortg co have "undervauled" a property.

The undervaluation is a guess from the mort co at best and if they had done ANY real research they would see they are way off the true figure from our experience. We have helped get these overturned.

Well that's completely incorrect. They take comparable information from Rightmove Plus in addition with some local knowledge to get their figures.

thank you for telling me my job. The figures they come up with are often out of touch will all reality. Recent 2 bed house morg co valued a rental at £995 reality £1200 to £1300. We helped get it uplifted to the correct value.

they have no local knowledge of the market or what individual property may achieve at that time.

If its a bog standard 2 bed 1 of 800 same houses on a housing estate then may get a close idea but the market is moving fast for rentals.

Edited by superlightr on Wednesday 27th July 13:46

Edited by superlightr on Wednesday 27th July 13:47

[ooid]

superlightr said:

they are often way out and most likely will be guessing. We as letting agent are asked to give a rental valuation for some our our new landlords when the mortg co have "undervauled" a property.

The undervaluation is a guess from the mort co at best and if they had done ANY real research they would see they are way off the true figure from our experience. We have helped get these overturned.

Do you include vacancy rates? In Commercial prop , three important parameters are: Current vacancy rate, last 12 months vacancy rate, 5 year average vacancy rate. Even if borrower has good LTV, strange vacancy rates might affect valuations dramatically, especially with the current rates.

[Killer2005]

superlightr said:

Killer2005 said:

superlightr said:

they are often way out and most likely will be guessing. We as letting agent are asked to give a rental valuation for some our our new landlords when the mortg co have "undervauled" a property.

The undervaluation is a guess from the mort co at best and if they had done ANY real research they would see they are way off the true figure from our experience. We have helped get these overturned.

Well that's completely incorrect. They take comparable information from Rightmove Plus in addition with some local knowledge to get their figures.

thank you for telling me my job. The figures they come up with are often out of touch will all reality. Recent 2 bed house morg co valued a rental at £995 reality £1200 to £1300. We helped get it uplifted to the correct value.

they have no local knowledge of the market or what individual property may achieve at that time.

If its a bog standard 2 bed 1 of 800 same houses on a housing estate then may get a close idea but the market is moving fast for rentals.

At no point did I make any mention of your job. Only pointed out that your comment that mortgage valuations are "guess work" to be incorrect. There is tonne of data used for Valuations and an audit trail backing it up, so to claim its guess work is plain wrong.

[superlightr]

Killer2005 said:

superlightr said:

Killer2005 said:

superlightr said:

they are often way out and most likely will be guessing. We as letting agent are asked to give a rental valuation for some our our new landlords when the mortg co have "undervauled" a property.

The undervaluation is a guess from the mort co at best and if they had done ANY real research they would see they are way off the true figure from our experience. We have helped get these overturned.

Well that's completely incorrect. They take comparable information from Rightmove Plus in addition with some local knowledge to get their figures.

thank you for telling me my job. The figures they come up with are often out of touch will all reality. Recent 2 bed house morg co valued a rental at £995 reality £1200 to £1300. We helped get it uplifted to the correct value.

they have no local knowledge of the market or what individual property may achieve at that time.

If its a bog standard 2 bed 1 of 800 same houses on a housing estate then may get a close idea but the market is moving fast for rentals.

At no point did I make any mention of your job. Only pointed out that your comment that mortgage valuations are "guess work" to be incorrect. There is tonne of data used for Valuations and an audit trail backing it up, so to claim its guess work is plain wrong.

the "expert" valuation they have given are wildly inaccurate to the real market rent to be worth very little.