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How can this happen.

6 replies

deste · 28/08/2013 16:42

We accepted an offer of a flat we owned in England about three months ago. They wanted to exchange in July but we were going on holiday and it was too soon. Last week we were run ragged trying to sort everything their solicitor and our solicitor wanted. Bearing in mind they hoped it would go through on the 9 August. This week they now tell us their mortgage has been refused because the husband is a contract worker. They are trying elsewhere. We are in Scotland and you cannot put an offer in for a house unless you have a mortgage in place. After all the paperwork we have filled up, bits of information we have sourced on our side how can we get this far and no mortgage in place. We paid insurance in case this happened but my daughter has to put a deposit down on her house which was bought on the strength of this sale in the next few weeks. We could have kept the property on the market if we had known. Does anyone know where we stand or do we just have to suck this up.

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50shadesofmeh · 28/08/2013 16:56

If you haven't exchanged yet either party can pull out without penalty I think. I'm in Scotland and needed an agreement in principal before making an offer but some people still fail when it comes to getting the mortgage offer .

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50shadesofmeh · 28/08/2013 16:57

Their solicitor should make sure actual mortgage offer is in place before they conclude the missives / exchange.

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MrsTaraPlumbing · 28/08/2013 17:20

In England there is no commitment until exchange of contracts.

The buyers are not to blame - you usally can't get a definite mortgage until that part of the process. You have no redress.

unfortunately properties are always taken off the market whilst this process takes place - typically for 2 or 3 months.
Something like 30% of house sold subject to contract do never go on to complete.

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deste · 16/09/2013 21:29

Well we are now one of the 30% of properties that did not go through. They were refused three times for a mortgage. Last Thursday they texted to say that it would be 1st of October before completion and then on Friday we got told there was no way they would ever get a mortgage. Four months the flat was off the market, we even had an offer last week but they persuaded us that they would definitely get a mortgage. He was coming back tonight but we have heard nothing so I suppose we have to start again. We put down new carpets and removed some of the furniture because that was a condition of the sale. The place now has odd bits of furniture in it so must look awful. My DD moves into her house in less than four weeks and will probably need a bridging loan unless a miracle happens. Unfortunately in Scotland we can't change our minds so they have to go through with it. Whoever says the buyers are not to blame is speaking rubbish. Why would anyone put an offer on a property if you could not afford it. In Scotland you need a mortgage promise in place before anyone considers selling you a house.

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kkag · 16/09/2013 22:34

In a lot of ways the Scottish system is better than the English as there is a binding contract in place (when missives are concluded) usually some weeks before the sale. I believe in England the contract doesn't conclude right til the last moment.

Once missives are concluded you are both tied in and until a mortgage offer is in place, no-one should conclude missives. This is what this couple have done to you. But there is absolutely nothing to stop someone putting in an offer without a mortgage in place.

Actually I am surprised your solicitor allowed you to arrange the house for your daughter before having missives concluded on your own. The same principle applies: you couldn't be 100% sure about the finances either. Looks like you are tied in but didn't wait to tie your buyer in first...

Really sorry for your predicament but I'm afraid you have no recourse for readvertising costs, carpets etc, as you didn't conclude missives. What is your lawyer saying about this as they should be guiding you.

Hope you get it resolved. I'm sure another buyer will come along...

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deste · 17/09/2013 14:59

They have paid their deposit on their new house which is a new build. They were lucky to get it because people were queuing up to buy them. They have paid £5000 plus on extras so they can't pull out even if they wanted to. The carpets are ordered and paid for and so are the white goods. They will be able to go ahead but it just means they have a smaller deposit now. It's just the fact we had to take it off the market for four months so could probably had it sold by now. We paid an insurance to cover costs in case of this happening, thank goodness.