Helping daughter with House Purchase

We were once in a similar position, with a couple putting in an offer then messing us about. Eventually we said you have 24 hours to do whatever they needed to do ( have forgotten what it was ) or we would pull out. We then found out they hadn’t even got a mortgage agreed!

Shirva

Be very wary of a Lifetime Mortgage! I think things may have changed a bit but my parents released £30,000 in 2002 and when my mother went into care in 2018, the Mortgage company had to ‘ agree’ that she needed care or I would have had to pay a £12,000 early redemption fee! Then when the house was sold, the debt had become £102,000. It was gut wrenching...once the initial money is borrowed, you are trapped

Shirva

For the benefit of all of us could you explain in more detail how it all happened it sounds really scary.

Be very wary of a Lifetime Mortgage! I think things may have changed a bit but my parents released £30,000 in 2002 and when my mother went into care in 2018, the Mortgage company had to ‘ agree’ that she needed care or I would have had to pay a £12,000 early redemption fee! Then when the house was sold, the debt had become £102,000. It was gut wrenching...once the initial money is borrowed, you are trapped

Call their bluff, don’t get involved in remortgaging, guarantor or equity share it opens a whole new can of worms, if you have spare cash or investments you can liquidate use that if you wish.

Your natural instinct is to help your DD. However, if you decided to release equity from your own property this could entail quite a bit of expense. As the loan would be secured on your house, you would likely need to pay arrangement fees, valuation fees and possibly legal fees. The bank would also need to be sure you could afford the repayments so you would need to apply in as much depth as a mortgage application. Also, there may be penalties with early repayment. It is not a quick process !

I agree with others who have said don’t back down. I’m in the same position and told the purchaser that if they are not happy then it’s their prerogative to look elsewhere. However if there are genuinely issues which impact on the purchase price it may be prudent to either have the work done or reduce the asking price to reflect this. However, in the current market property prices seem to be increasing week on week. Good luck it is challenging selling at the best of times never mind the worst of times.

When my parents were selling their house, their buyers kept bringing up very minor points, pretty sure to grind my parents down into dropping the price. Eventually my Dad told them if there was anything else, the house was going back on the market the next week. Zoom! Sale done.

Think long and hard... Do not think of lending what you can't afford to lose. Property in my jaundiced view is a dirty and desperate game. Some Building Socs offer loans against your property (can't remember the right term - second mortgage? Anyway I'm thinking of what you would do, say if you wanted a loan for an extension etc - So you'd still own all of your home, just a long term loan to help your daughter. Generally you can pay back sooner than, if circs permit.

We had a buyer like that - years ago - we gave her a reduction she asked for, then the transaction just didn’t seem to be moving, then she came and asked for another reduction which we couldn’t afford, so we said no. She dropped out, and our solicitor said she suspected she’d just been playing games. She knew we needed to move away for my husband’s new job, and were expecting a baby, so I think she assumed if she messed us around for long enough we’d be desperate to sell!

Anyway, we moved into a rented house, put the house back on the market at a higher price (because prices had gone up) and ended up selling it for more than the original price.

Some people behave really dreadfully when buying & selling property!

I know your instinct is to jump in and help but the prospective buyers having secured a sum off may come back with some other reason, so if at all possible it may be best to call the buyer's bluff and see what happens before getting into complicated money transactions

I would get advice from a mortgage advisor or financial advisor before you committing to either a bridging loan or equity release, as both can be high interest.
I agree as to put property back on the market

Equity release isn`t as good as it sounds.
The small print needs reading from front to back.
There are a hell of alot of clauses which i find very worrying.
Please be carefull.

We moved 10 days ago and it was a complete nightmare. from start to finish our buyer not only managed to get us down by far too much which we bitterly regret now but he kept threatening, blackmailing and trying to bully us by telling us he was pulling out if we didn’t throw in brand new blinds, bathroom cupboards, exchanging and completing on certain dates etc, in the end I knew our legal fees were covered by an insurance policy we took out that paid for our legal fees if any of the others in the chain pulled out so the day before exchange I got so sick of his threats I phoned the estate agent and our Solicitor up and told him to pull out and that we didn’t care anymore, I also told the agent (who we found out was his friend and had under valued our place we found later) that we would be taking our house off the market until 2022 and wouldn’t sell it to him again! It was a bluff but I actually didn’t care at that point and it worked, i told him no more threats and I would choose the dates! It’s not necessarily the end of the world if you’re daughter doesn’t get this house is it as for you to get into debt might be more trouble than it’s worth?

Yes the Scottish system has its problems too. There are several potentially expensive steps (mortgage valuation, solicitors) before submitting your offer.

There can be several offers all opened on the same day. There is no guarantee yours will be successful.

A relative offered for nine properties with all the attendant expense on each one before having an offer accepted. She only managed that by bidding a high amount to make sure she wasn’t outbid.

A lot of people are misunderstanding the Scottish system.
The contract is only binding once “Missives are completed” ie all the searches are done and agreed. Up till that point either party can back out. In actual fact people rarely do that and that is why people still think the acceptance of a written offer is binding. Perhaps the Scots are just more trustworthy!
PS I lived in Scotland for nearly 60 years but live in London now.

I would call their bluff too and say house was going back up for sale. The buyers then lose the money they have paid for solicitors, searches, etc, they'll not chance it. I wouldn't do equity release, but that's me. A friend of mine said for me to do it as I only have a sister left and to enjoy my money, but when I read up about it, I wasn't impressed at all.

I would call their bluff, I had to.
A price was offered on my house way above the asking price, which blew other offers away.
Then they sort of kept finding things wrong with the property, and wanted to reduce by £15,000.00.
I just said ok, I will take the property off the market, do the repairs myself, then remarket it. And could I have an answer by close of business tonight please?

I am sorry this does not answer your question about equity loans. A bridging loan may be better, it costs more but is short term, if it is something you really want.
I do hope she finds a solution, it’s very stressful.

We've just become the buyers who pulled out because the sellers were making no effort to actually get the transaction to the point of exchange. We kept asking for a completion date, for several weeks, then said that we would start looking at other houses, then found one we liked, had an offer accepted, and told the first lot we were withdrawing our offer. Suddenly they were prepared to move in two weeks - but it was too late by then. It's cost us about £3,000 in abortive fees.

People are very odd about house moves. The lawyers and estate agents don't help either.

Tell the buyers that unless they sign/exchange by a set date the property goes back on the market - and mean it! That should sort out whether they are stringing you along.

Fortunately never been in too stressful a house sale but when I’ve been messed around with by buyers I just pull out, that usually concentrates their minds.

Ramblingrose22 is quite correct, the whole business of house purchase is in need of an urgent update. Each time I’ve moved I’ve thought, never again. We’ve experienced buyers pulling out the week before the move, buyers trying to reduce the price at the last minute, and in one extreme case the buyers had moved into the empty property before contracts and exchange had taken place. Even when it went smoothly it was extremely stressful and I would have thought it could be improved.

I've bought and sold prooerties in England and Scotland. The system in England is terrible holding the seller to ransome until contracts are exchanged. In Scotland a lit if people think a verbal offer is binding, it's not though once a formal written offer is made and accepted that's it. If either party reneged then expenses are to be paid. Still have these awful Home Reports that mean nothing. Surveyor is supposed to dictate a price but that doesn't work as lenders do own valuation.

if they haven't exchanged contracts there is nothing stopping them saying they are putting the house back on the market unless their present buyer exchanges within a certain time.then if still being stalled go ahead and put back up for sale.

Once the deposits are paid the buyers won’t get that money back so I would call their bluff and carry on with the transaction

I know of three people whose buyers informed them on the day of exchange that they were paying £10,000 less. This was a lot of money in those days. One stood fast and the other two caved in.

If the seller is in a chain and wants to buy another property they may well feel they have to cave in. My sisters and I are trying to sell our late mother's flat and the flat has been difficult to sell so we might have to cave in.

The process of buying and selling a house should have been reformed years ago but successive governments have bottled it.

A non-refundable deposit of a sum the buyer wouldn't want to lose should be payable when a buyer's offer is accepted. Or, as in Scotland I think, an offer to buy that is accepted should be regarded as a contract so that the buyer cannot start messing about saying they'll pay less.