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Help to Buy - anyone knowledgeable about this?

(13 Posts)
ChampagneTastes Wed 12-Apr-17 19:10:15

We have sold our house to first time buyers who are using help-to-buy, presumably the shared ownership type as they are military and this is not a new-build house. I'm really pleased to sell to first time buyers (this was our first home and has lots of happy memories so I like the idea that we can pass it on to someone in a similar situation) and they are being very accommodating to the fact that our vendor is taking a very long time to find somewhere new.

The problem is that they - like most people who do help to buy - do not have a huge amount of cash for the deposit. Any cash that they have is going on the solicitors and they are paying for the house with the mortgage and the government loan (as far as I can tell). They have asked to exchange and complete on the same day which we have said no to as it could be a disaster. They have now asked to pay no deposit on the day of exchange as they won't actually get the money for the house until completion day.

I am inclined to say that's fine as they are clearly committed to the house but I would like something to just firm things up a bit. This is the first time I have ever sold a house so could people advise me (a) is this normal? (b) Do you think they are going to flake out at the last minute? (c) Is there any way I can protect us until completion?

Bluntness100 Wed 12-Apr-17 19:12:17

The exchange contract protects you, I can't remember the liabilities if they don't complete, but it's not insignificant.

Bluntness100 Wed 12-Apr-17 19:12:34

Your solicitor should be able to advice on this?

NoArmaniNoPunani Wed 12-Apr-17 19:15:05

I think the risk is more for them. If they exchange and don't get the money through to complete they could end up in the shit

Floggingmolly Wed 12-Apr-17 19:17:17

Is it a timing issue, to do with when you've agreed to complete, or are they saying the money will not actually become available until after exchange of contracts, whenever it's scheduled?
They sound quite confused because I can't image either the mortgage lenders or the administrators of the Govt scheme stipulating any such thing confused
The process takes place as it does for a reason.

ChampagneTastes Thu 13-Apr-17 08:04:16

Thanks. @Bluntness100, my solicitor let me know what they wanted but is now on holiday - I will question her further once she's back.

@FloggingMolly I think they are a bit confused but then frankly htb IS very confusing! I shall ask some further questions.

Kiroro Thu 13-Apr-17 09:57:40

OK... so they have like a 5% cash deposit, and they are funding the rest with help to buy + mortgage.

So they can not pay a 10% cash deposit to the solicitor on exchange? In this case it must be possible to exchange with just 5% deposit held, probably would be a bit more than that as they would have to have cash for stamp duty and sol fees as well.

Or they have a 0% deposit? So can't transfer anything to sol on exchange? I didn't think you could buy with 0% deposit any more even with HTB?

Personally I would never look to exchange and complete on the same day.

Exchange gets delayed and you might not have much notice in advance of being ready so it is hard to pack and book movers and deal with your onward purchase.

ChampagneTastes Thu 13-Apr-17 12:12:03

I think that they perhaps have X but hadn't taken stamp duty etc into account so that is being swallowed up.

Kokusai Thu 13-Apr-17 12:44:41

I think that they perhaps have X but hadn't taken stamp duty etc into account so that is being swallowed up.

But they don't pay stamp duty until completion. If they haven't got the right % deposit the mortgage requires, plus funds for stamp duty and legal fees they aren't going to be able to proceed.

I think you should say no to exchange and completion on same day.

I would ask (via solicitor) for an explanation of why they want to exchange and complete on the same day, and for proof of affordability/proof of funds.

LadyPenelopeCantDance Thu 13-Apr-17 13:16:27

The Forces help to buy is completely different. The scheme allows forces personnel to borrow up to 25k to use as their deposit.

My guess is they have yet to receive the deposit money from the government to use.

Halifax and the .gov website has a bit of info about it which might help you understand how it works.

ChampagneTastes Thu 13-Apr-17 13:21:36

Ah, thank you LadyPenelope. That starts to make more sense. I couldn-t get much info from the .gov site but I'll take a look at the Halifax one.

DragonNoodleCake Thu 13-Apr-17 15:00:51

I thought it was common to exchange and complete the same day. I did both times I've bought. I'm in Scotland though and I know it has slight differences in law

Rangirl Thu 13-Apr-17 15:08:52

Scottish system completely different,no such things as exchange ,conclusion of missives is the equivalent and very rarely happens on the same day

Help to buy is very bureaucratic and paper heavy on the purchaser's side but should make no difference to a seller

But check out any queries with your solicitor

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