[Misc] House buying & selling question

[Springal]

I’m selling an empty house at the moment south of New Church Road. Our home for 5 years then rented out for last 2 years. Should be on with Goldin Lemke in a few days. Photos done today in the sunshine. Very few houses available in Hove at the moment, especially with a long garden. No chain our end and I’ll do the conveyancing myself, about 2 hours work.

I’ll report in on the progress.

How many bed?

 

[knocky1]

How many bed?

3 beds

 

[clockend1983]

Our neighbours told us of the feedback from the estate agents, on the viewings.
Two out of the five viewers were just wasting time, not really interested in house

Fair enough,I could think of better things to do
Lockdown has affected everyone differently I guess

 

[Wardy's twin]

Just to throw a slightly less conventional option into the ring, depending on your circumstances, here’s what I did last year.

We were in the fortunate position of having a reasonable cash deposit (around 35%), which meant that we were theoretically able to get another mortgage for our new house without having to have sold our old one. The tricky thing was that we wouldn’t realistically have been able to sustain the monthly remortgage payments on both houses.

So, what we did was temporarily remortgaged our existing property onto an interest only mortgage which reduced the monthly repayments to a nominal figure so that we could go ahead and purchase our new home and then sell our old one any time we liked.

There were multiple benefits to this. It meant we were effectively chain free (which given what would ensue with Covid was crucial), gave us more of a case during negotiations and avoided the stress of moving out of one place and into another on the same day. There were some huge, unforeseen advantages too. In April I was able to renegotiate a significant reduction in price on account of the uncertainty of the pandemic - we ended up 8% under the asking price in an area where houses regularly go for more than the asking price. House prices in this area of Leeds are broadly up 10% since the mortgage market reopened, so we’re up almost 20% in the space of a year, remarkably.

It also meant that we were able to sell our old house on the back of rising house prices, so we gained there too. You’re in a stronger position as a seller, too. Of course, there are risks there in terms of what house prices do in the medium-term, and we got lucky, so keep that in mind.

Of course, this doesn’t work unless you have, or can create the cash to put down on the new house. However, since you’ve owned your current place for 23 years, I’m assuming you have a reasonable amount of equity. With that in mind, you could free up some of your existing equity as part of your remortgage and raise the cash that way.

The down sides? Well, you have two mortgages to sort out and the products you need are fairly specialist, however we used NSC’s very own [MENTION=3887]Uncle Spielberg[/MENTION] for this and it was relatively painless (at least for us). Less complex than chains can be, arguably. You’ll also pay a premium on stamp duty as its classed as a second home, however you have 3 years to sell the property and claim this back. You also need to check the early repayment terms of your remortgage as well. And of course, as I’ve said, there are risks in terms of what house prices do. If you buy now and then house prices crash, you may lose value on your sale. That said, the fact that you place yourself in a far stronger position as both a buyer and seller should hopefully offset much of that risk (though of course, I cannot see into the future).

Anyway, just some food for thought. As an option it worked brilliantly for us on every level, in part due to a quirk of the pandemic’s impact on the market, however it was my plan long before I’d heard of Covid-19 and I’d happily do it again.

Happy to answer any questions.

think this type of approach is getting more common..

 

[Wardy's twin]

It surprises me that more people don't do it; I just don't think many people have thought of it. In terms of a stress-free move, aside from all of the financial benefits we lucked out on, that's exactly why I did it.

My good lady wife has a rather low stress threshold and a rather high anger output; trying to get out and in all in the same day was never really an option for us. It also meant that we could get the whole house properly decorated and kitted out without feeling like we were living on a building site, so that was a bonus and another potential stressor removed from the equation.

It's not for everybody, and you have to be prepared to accept a little bit of risk, but particularly in the current climate it's worth at least entertaining the idea if you're desperate to move.

Seems a very good idea
You said you could take your time and sell when you liked.
Would you have been able to rent your number 1 home out for a period
before selling it or would there be complications doing this?

I guess the only potential down fall is whether you end up waiting to buy in which time the house prices might continue to rise and your cash asset (post sale) grows slower.

 

[dejavuatbtn]

We have just exchanged after a nightmare year. Definitely need to have a punter before you can put an offer in. We lost two buyers - one due to the delays and with the other the buyer’s wife decided to opt for a divorce!
Use a decent estate agent who will manage the sale right through to completion.
We found a place in June and have been in a chain of 7 and never thought it would take us so close to the end of March deadline for stamp duty savings.
Good luck!

 

[Poojah]

Seems a very good idea
You said you could take your time and sell when you liked.
Would you have been able to rent your number 1 home out for a period
before selling it or would there be complications doing this?

Yeah, absolutely. The product we took out for our remortgage is intended as a rental product, and we did intend to rent it out originally. The explosion of the housing market however meant that we thought it was probably better to sell up sooner rather than later.

As I say, the main downside in our case was that we had to fork out a fair whack extra for stamp duty as a second home. You have three years from completion of your new property purchase to sell the old place up and claim this back however.

 

[Poojah]

I guess the only potential down fall is whether you end up waiting to buy in which time the house prices might continue to rise and your cash asset (post sale) grows slower.

If you can, I’d recommend buying and remortgaging at the same time. We found the place we wanted, had the offer accepted on the basis that there would be no chain and then both property purchase and remortgage executed on the same day (in fact this was a condition of the remortgage).

The only complexity I can think of would be if you didn’t have enough of a cash deposit for the new purchase, as you’d need proof of funds to progress that application. In that case you would have to remortgage in advance, but I think this would potentially be more complicated in finding a suitable remortgage product.

I’m not an expert though, I’m just going off my limited experience. Definitely worth speaking to an expert like Uncle Spielberg to explore the options.

Edit: apologies Wardy’s Twin - I misread and subsequently misreplied to your post!

 

[Chicken Run]

I’ve heard stories of unscrupulous buyers who offer on a property on the basis of a remortgage on existing so no chain, then if seller accepts put their home on the market and half way down the line amazingly add their sale to the chain and canx re mortgage, the seller whilst furious knows they are trapped as the sale is well advanced.

 

[clockend1983]

Yeah, absolutely. The product we took out for our remortgage is intended as a rental product, and we did intend to rent it out originally. The explosion of the housing market however meant that we thought it was probably better to sell up sooner rather than later.

As I say, the main downside in our case was that we had to fork out a fair whack extra for stamp duty as a second home. You have three years from completion of your new property purchase to sell the old place up and claim this back however.

Thanks very much

 

[thedonkeycentrehalf]

Thanks all - good to get some real life (well, NSC!) experience of things. Will see what comes out this week around Stamp Duty extensions and then decide then. Local estate agents seem to be shifting properties very quickly from what we can see.

 

[Bodian]

Our neighbours told us of the feedback from the estate agents, on the viewings.
Two out of the five viewers were just wasting time, not really interested in house

They were just glory hunters wanting to see if there was any chance of having famous neighbours...

 

[Garage_Doors]

Before you can make an offer on a property you need to show that you have the funds & or mortgage in place to fund it.

 

[Uncle Spielberg]

Mrs DCH has told me that we are considering moving house. As we have lived in the same place for over 23 years, it is fair to say that I am a little out of touch with the current ways.

With regards to buying and selling, is it better to find somewhere first and then find a buyer for yours or the other way around? I know back when we bought our current place it was better to find somewhere first but I know this changes depending on the market.

Thanks

Have your property on the market at least before you make an offer on a new property or you will be behind the curve of someone who has and has a buyer or a cashbuyer, the agent will also want to make sure you have a mortgage agreement in principle usually

 

[knocky1]

Yeah, absolutely. The product we took out for our remortgage is intended as a rental product, and we did intend to rent it out originally. The explosion of the housing market however meant that we thought it was probably better to sell up sooner rather than later.

As I say, the main downside in our case was that we had to fork out a fair whack extra for stamp duty as a second home. You have three years from completion of your new property purchase to sell the old place up and claim this back however.

Just searched for this thread as I wondered how your strategy avoided the high stamp duty on a second home. Now I see there is a claim back period. Good info.

 

[Nitram]

Brighton seems bonkers at the moment. Our neighbours sold on first viewing, agreed another sale which fell through so they are going to rent when sold as they feel this gives them the best options. My eldest bought a house in March and completed after the first lockdown. I thought he should wait and see where the market was going. If he had done he would not got into the market at all. Glad he ignored my advice!

 

[KeegansHairPiece]

Thanks all - good to get some real life (well, NSC!) experience of things. Will see what comes out this week around Stamp Duty extensions and then decide then. Local estate agents seem to be shifting properties very quickly from what we can see.

My parents in their 70s are wanting to move from Hampshire to East Sussex (and would blame them...), but the market in many rural places such as they’re looking around Uckfield, Crowborough, Ringmer etc. does seem a little slower. Things are hanging around a bit - perhaps now we have a ‘road map’ there’s a little bit of waiting to see what happens in the summer.

They’ve been a bit cautious so haven’t been pushing to view things until they have an offer, but then given people are viewing theirs without an offer, they’re being a bit more bullish about going to view properties.

 

[seagully]

Currently selling my house in Coventry and moving into a rented property in Sussex. Got a cash buyer lined up from Hong Kong and is obviously chain free as we aren't buying but the conveyancing process is taking an age. We can afford to rent and pay the mortgage for 6 months ish but getting worried that the buyer will pull out due to the delays. Such a stressful process.

 

[Ooh it’s a corner]

Agree - a good conveyancer/solicitor is a great help as some are very very slow. At least you’ll no longer have to M40/M25/M23 etc for home games - I’ve only been late once so far though - it’s driving back after a defeat that’s worse than traffic! Good luck!

 

[thedonkeycentrehalf]

When I heard thing were moving fast, I didn't realise it was at a Craig David pace!

We decided to move forward so chose our agent on Saturday, he came around Tuesday lunchtime to take photos including a 3d virtual viewing tool. Went on the internet at 4pm Tuesday - six viewings Wednesday, three more tonight, four tomorrow and 5 Saturday. Not accepting any more at this stage.

They only allow viewings for those who are without property or have a buyer for their house. Of the six from last night, two have already put in offers.