Unconditional offer to purchase property

[Dr Solomon]

Is it possible to make an unconditional offer to purchase a property when purchasing with a mortgage?

[Croutons]

If you're reliant on a mortgage, no, of course not, as if there's a retention or other adverse lending decision, you won't have enough money to buy it.

[Dr Solomon]

Are you 'allowed' to pay the difference? e.g. mortgage is for £150k but mortgage co. only allows £130k - could you then pay an extra £20k deposit to cover?

[22s]

You're "allowed" to do whatever you want - whether the vendor accepts it or not is down to them.

Any agreement contingent on finance is not unconditional.

In your example, what if the lender says "actually, we're only going to lend £50k" or "£20k" or "£0k". Unless you have the cash to pay for the property even if the lending falls through then the offer cannot be classed as unconditional.

[anonymous-user]

There are two aspects,

Can you rock up anywhere, any time and instantly make a binding commitment to buy a property?

• Yes, so long as it's on a written, signed document, and
• Yes, if you make a winning bid at an auction.

Can you actually afford to pay for the property? Now that's a different question altogether, and if you can't afford to go through with the transaction you can/will be sued for breach of contract.

It makes no difference where you're getting the money from - the above always applies. In other words it makes no difference whether you're getting a mortgage or not - the above always applies. However, a seller will usually refuse to enter a binding contract with you unless you can demonstrate you have the money to pay for the purchase, usually in the form of a mortgage offer. Where there is a chain of buyers and sellers it would be utterly disastrous if someone in the middle of the chain failed to pay. A seller would end up not being paid and therefore unable to pay for the next new house and so on up the chain. Disaster.

A verbal commitment to buy or sell a property is never binding in England & Wales - hence the possibility of "gazumping", pulling out etc. (Scotland is different)

[Dr Solomon]

Context:

An elderly neighbour has passed away near where I previously lived. The Executor has gotten in touch with myself and another neighbour to see if we are interested in purchasing as he does not want to go through the hassle of putting a board up.

The probate Solicitor is dealing with initial offers until it is passed to their conveyancing department.

I put in an initial offer of £155k the other neighbour put in £170,050. I then put an offer of £173k and the other neighbour put in an offer of £174k.

The Solicitor then got in touch asking for our 'best and final' offers. I put in an offer of £205k subject to the usual valuation/survey etc. The other neighbour has not responded. Why the Solicitor kept telling each party the other's offer, I don't know.

Now the Executors and Solicitor are saying they want our best and final unconditional offer but as has been stated on this thread, one could put in a higher offer but will not be legally bound to it until it comes to contracts.

In the event that the valuation comes back and there is a significant difference in price between what is offered and what the property is worth, I am guessing that the choices are then to cover the difference, attempt to renegotiate or simply pull out?

Edited by Dr Solomon on Wednesday 13th June 14:06

Edited by Dr Solomon on Wednesday 13th June 14:06

[anonymous-user]

Judging by what's happened so far you aren't in Scotland so you can offer on whatever terms you like. It doesn't become binding until exchange.

And there are 50,000 reasons why the solicitor keeps telling each of you what the current offers are.

[Jobbo]

By 'unconditional' I assume they mean that the offer is not subject to survey or anything else - there's no need to say it's subject to you getting a mortgage. Any offer is always subject to contract; that doesn't make it a conditional offer in the sense they mean.

[Dr Solomon]

Jobbo said:

By 'unconditional' I assume they mean that the offer is not subject to survey or anything else - there's no need to say it's subject to you getting a mortgage. Any offer is always subject to contract; that doesn't make it a conditional offer in the sense they mean.

I think that's right but from what I am reading, it isn't legally binding.

[Jobbo]

Dr Solomon said:

Jobbo said:

By 'unconditional' I assume they mean that the offer is not subject to survey or anything else - there's no need to say it's subject to you getting a mortgage. Any offer is always subject to contract; that doesn't make it a conditional offer in the sense they mean.

I think that's right but from what I am reading, it isn't legally binding.

Correct (if you're in England or Wales).

[Mr Pointy]

Depending on the wording of any communication, isn't it possible to create an agreement to buy? The usual procedure goes like:

"We offer you £x for your house"
"We accept your offer & will instruct our solicitors to draw up a contract"

But what if the OP has said "I agree to purchase your house for £x". Doesn't that form a contract?

[anonymous-user]

Mr Pointy said:

Depending on the wording of any communication, isn't it possible to create an agreement to buy? The usual procedure goes like:

"We offer you £x for your house"
"We accept your offer & will instruct our solicitors to draw up a contract"

But what if the OP has said "I agree to purchase your house for £x". Doesn't that form a contract?

Not with property in England and Wales.

[Dr Solomon]

desolate said:

Mr Pointy said:

Depending on the wording of any communication, isn't it possible to create an agreement to buy? The usual procedure goes like:

"We offer you £x for your house"
"We accept your offer & will instruct our solicitors to draw up a contract"

But what if the OP has said "I agree to purchase your house for £x". Doesn't that form a contract?

Not with property in England and Wales.

Even if you say "I make an unconditional offer of £x"? And it later transpires that you need to renegotiate?!

[anonymous-user]

desolate said:

But what if the OP has said "I agree to purchase your house for £x". Doesn't that form a contract?

Not with property in England and Wales.

You need to be very careful, because iIf you make your offer in writing (for instance by email) and it's not marked "subject to contract" the seller can simply write back saying "thank you for your offer which we accept". That IS then a binding written contract and fully enforceable.

https://parissmith.co.uk/blog/even-emails-text-mes...

[boxst]

I offered on a house the other day and the seller wanted an immediate non-refundable deposit of quite a lot of money as other buyers 'have pulled out'. Now that is something that focuses the mind. That is what I call unconditional ... (I said 'no').

[Badda]

Based on your bid behaviour, I’m surprised the vendor didn’t just go straight to an EA!

[Jobbo]

rockin said:

You need to be very careful, because iIf you make your offer in writing (for instance by email) and it's not marked "subject to contract" the seller can simply write back saying "thank you for your offer which we accept". That IS then a binding written contract and fully enforceable.

https://parissmith.co.uk/blog/even-emails-text-mes...

I don't think you risk accidentally forming a contract to purchase a property that way: https://www.legislation.gov.uk/ukpga/1989/34/secti...

[anonymous-user]

Is the quoting fked?

[Dr Solomon]

Badda said:

Based on your bid behaviour, I’m surprised the vendor didn’t just go straight to an EA!

I would rather suggest it is the vendor that is being greedy and / or an incompetent Solicitor.

As you say, they could just put a board up via an EA and do it the regular way but they don't want to pay those fees and want to have a quicker sale process. They are inviting more than one party to bid but then are divulging bids to each party and subsequently stating they don't want a bidding war . Then they want 'best and final' offers but then don't accept them (because they suspect the property is not worth that much) and then want an 'unconditional' offer.

[paulrockliffe]

Actually I'm not sure the vendor is being greedy enough. They have a statutory duty to act in the best interests of the Estate, not to do whatever suits them best. They're unlikely to be fulfilling that duty if they don't put the property on the open market.