Selling our 1st house - query ref buyer commitment
Discussion
Hello learned folks with much experience of selling houses!
Long story short - selling our 1st house (in England, in case it matters), and our potential buyer (his offer accepted) is an investor with cash to spend. Happy days and all that, but he's pushing us really hard to be out of the house in the next few weeks. Which would be fine, if we had an offer accepted on any of the houses we like!
We accepted the offer on the basis that he wasn't 'in a rush' and was happy to wait for us to find, when little is coming on the market that's the right type of house (very PH as chief requirement is a double garage you can actually get 2 cars in!) in our area. He now wants to complete by end of Oct.
He's making noises that if he isn't seeing progress imminently he's going to pull out -we have viewings lined up over the next week for stuff that's recently come on the market, but we've already offered on 2 properties which downsizing owners weren't prepared to accept. Given we're buying a house for twice the value of the one we're selling we're keen not to pay over the odds, and to make use of the supposed benefits of a very short chain.
Legal packs have been exchanged and we've got draft contracts to sign, but held off on the basis we haven't found yet.
Given the grumbles that make us think he's going to leave us in the lurch if he doesn't like our timing, is there any point prior to completion where the buyer is basically committed financially to the point we could at least claw back the cost of solicitors if he backs out? I'm wondering if signing contracts, if he does the same, gives us more security that we're at least not going to be out of pocket if he buggers off and buys something else?
My suspicion is he's earning next to no interest on a large wedge of cash (he's looking to buy at least 2 houses as BTL after selling a business) and is getting annoyed that he's not earning the rental yield that he's looking for, but that's just my opinion and not based on anything said.
Our fallback option is to offer to complete and to rent the house back at a below market rent, which is still going to pay more than the bugger all he's getting from the money being sat in the bank, but that assumes we're right on his reasons for pressing us and that it suits him. My understanding is that he's no plans other than to market the place for rent - isn't replacing the kitchen, boiler or bathroom which we'd be doing if we stayed put.
Adrian
Long story short - selling our 1st house (in England, in case it matters), and our potential buyer (his offer accepted) is an investor with cash to spend. Happy days and all that, but he's pushing us really hard to be out of the house in the next few weeks. Which would be fine, if we had an offer accepted on any of the houses we like!
We accepted the offer on the basis that he wasn't 'in a rush' and was happy to wait for us to find, when little is coming on the market that's the right type of house (very PH as chief requirement is a double garage you can actually get 2 cars in!) in our area. He now wants to complete by end of Oct.
He's making noises that if he isn't seeing progress imminently he's going to pull out -we have viewings lined up over the next week for stuff that's recently come on the market, but we've already offered on 2 properties which downsizing owners weren't prepared to accept. Given we're buying a house for twice the value of the one we're selling we're keen not to pay over the odds, and to make use of the supposed benefits of a very short chain.
Legal packs have been exchanged and we've got draft contracts to sign, but held off on the basis we haven't found yet.
Given the grumbles that make us think he's going to leave us in the lurch if he doesn't like our timing, is there any point prior to completion where the buyer is basically committed financially to the point we could at least claw back the cost of solicitors if he backs out? I'm wondering if signing contracts, if he does the same, gives us more security that we're at least not going to be out of pocket if he buggers off and buys something else?
My suspicion is he's earning next to no interest on a large wedge of cash (he's looking to buy at least 2 houses as BTL after selling a business) and is getting annoyed that he's not earning the rental yield that he's looking for, but that's just my opinion and not based on anything said.
Our fallback option is to offer to complete and to rent the house back at a below market rent, which is still going to pay more than the bugger all he's getting from the money being sat in the bank, but that assumes we're right on his reasons for pressing us and that it suits him. My understanding is that he's no plans other than to market the place for rent - isn't replacing the kitchen, boiler or bathroom which we'd be doing if we stayed put.
Adrian
Well there's this point commonly known as exchange of contracts 
The other option open to you is to move into rented upon completion. That way, the investor gets their property, you get your money and some time to work on finding your next home. It also means you put yourself into a stronger position for your next home as you'll effectively be a first time buyer to your vendor and not bringing a chain with you.
The other option open to you is to move into rented upon completion. That way, the investor gets their property, you get your money and some time to work on finding your next home. It also means you put yourself into a stronger position for your next home as you'll effectively be a first time buyer to your vendor and not bringing a chain with you.
We'd rather not have the agro of moving into rented - the rental value of something even smaller than we have now would be double our mortgage payments, at least, and I'm sure they'll want to pin us down for 6 months minimum. Being virtually chain free doesn't seem to be convincing any of the semi-retired folk we're dealing with as buyers that it might just be the quickest house move they'll ever have.
I know full commitment is on exchange, but I'm sure I read 'somewhere on the www' that exchange of contract had at least some higher level of commitment than none at all? I recall having to take out buildings insurance when we exchanged when we bought the house.....
I know full commitment is on exchange, but I'm sure I read 'somewhere on the www' that exchange of contract had at least some higher level of commitment than none at all? I recall having to take out buildings insurance when we exchanged when we bought the house.....
Adrian E said:
Legal packs have been exchanged and we've got draft contracts to sign, but held off on the basis we haven't found yet.
Assuming you're in E&W (Scotland is another country and a totally different sytem applies) then nothing is set in stone until contracts are exchanged. So make sure no exchange takes place unless you are happy to proceed.Adrian E said:
Our fallback option is to offer to complete and to rent the house back at a below market rent, which is still going to pay more than the bugger all he's getting from the money being sat in the bank, but that assumes we're right on his reasons for pressing us and that it suits him. My understanding is that he's no plans other than to market the place for rent - isn't replacing the kitchen, boiler or bathroom which we'd be doing if we stayed put.
I wouldn't even go there. He is under no obligation to agree to rent the property back to you. If you exchange and he decides on completion he doesn't want you as a tenant you'll have to start over looking for a new pied-à-terre.No matter how attractive the offer of cash on the table may be don't allow yourself to be seduced by it. He knows it gives him some leverage but your first priority is to make sure you have somewhere to live. Unless the offer price is sufficiently attractive to allow you to rent and be no worse off financially until you find the property you're looking for (and who knows how long that will be?), dont allow yourself to be bounced. If the deal falls through that's life. He's not the only buyer in the world..
JPJPJP said:
Sounds to me that the buyer is committed, but the sellers want their cake and eat it!
OP's situation is quite normal. Most house sales/purchases usually involve some kind of chain.OP - as others have said there are 2 options
1. Sell and rent (more hassle and cost for you but at least you're not in a chain anymore)
2. Tell potential buyer to wait (less hassle/cost in terms of moving out and renting but who knows when another buyer will turn up)
I'd go for option 1 - moving a 2nd time in quick succession isn't that bad as you probably won't have to unpack a lot of stuff. Plus it gives you time to pick and choose your new place rather than having your hand forced. In legal terms there's nothing you can do until exchange of contracts which in any case would commit YOU to moving out by X date.
To answer one question, if you haven't exchanged contracts then you have no climax uf he pulls out, just as he would have none on you.
Imo, he would have a stronger moral case than you do. You're trying to screw down your sellers at his inconvenience and possible cost.
In the end it's up to you. If you're lucky, he'll wait. If you're not he'll go and you'll have fruitless costs to cover.
Do you feel lucky?
Imo, he would have a stronger moral case than you do. You're trying to screw down your sellers at his inconvenience and possible cost.
In the end it's up to you. If you're lucky, he'll wait. If you're not he'll go and you'll have fruitless costs to cover.
Do you feel lucky?
Sheepshanks said:
Adrian E said:
I know full commitment is on exchange,
..
Correct...
Adrian E said:
but I'm sure I read 'somewhere on the www' that exchange of contract had at least some higher level of commitment than none at all? ..
What are you trying to describe here?Odd isn't it? OP seems to think there is something called 'exchange' and something called 'exchange of contracts' but it appears he's talking about the same thing and it hasn't happened yet.
For clarity, OP, there is no financial obligation between buyer and seller until contracts are signed and exchanged. At that time a date for 'completion' is agreed. If there are any delays or if a party withdraws between exchange and completion the other party has a right to compensation. As I understand it.
REALIST123 said:
Sheepshanks said:
Adrian E said:
I know full commitment is on exchange,
..
Correct...
Adrian E said:
but I'm sure I read 'somewhere on the www' that exchange of contract had at least some higher level of commitment than none at all? ..
What are you trying to describe here?Odd isn't it? OP seems to think there is something called 'exchange' and something called 'exchange of contracts' but it appears he's talking about the same thing and it hasn't happened yet.
For clarity, OP, there is no financial obligation between buyer and seller until contracts are signed and exchanged. At that time a date for 'completion' is agreed. If there are any delays or if a party withdraws between exchange and completion the other party has a right to compensation. As I understand it.
You must remember he's (ostensibly) an investment buyer and has no emotional ties to your property.
the common tactic from this type of buyer is to reduce the offer a couple of hours before exchange; like I said , they have no emotional attachment to the property and simply want the best deal available.
the common tactic from this type of buyer is to reduce the offer a couple of hours before exchange; like I said , they have no emotional attachment to the property and simply want the best deal available.
konark said:
You must remember he's (ostensibly) an investment buyer and has no emotional ties to your property.
the common tactic from this type of buyer is to reduce the offer a couple of hours before exchange; like I said , they have no emotional attachment to the property and simply want the best deal available.
Yep, and a good reason not to sell to them.the common tactic from this type of buyer is to reduce the offer a couple of hours before exchange; like I said , they have no emotional attachment to the property and simply want the best deal available.
Alucidnation said:
konark said:
You must remember he's (ostensibly) an investment buyer and has no emotional ties to your property.
the common tactic from this type of buyer is to reduce the offer a couple of hours before exchange; like I said , they have no emotional attachment to the property and simply want the best deal available.
Yep, and a good reason not to sell to them.the common tactic from this type of buyer is to reduce the offer a couple of hours before exchange; like I said , they have no emotional attachment to the property and simply want the best deal available.
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