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AIBU?

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Original poster

To ask a potentially stupid question about house buying

17 replies

FizzyPink · 09/07/2020 16:30

Currently DP and I live in a house owned by DP’s mum. The deal is that we pay the mortgage and when we leave, the house will be sold and DP will be gifted a sum of money from the sale of the house (probably circa £20k). We don’t necessarily need this money as we have a deposit already saved but it would be nice to put some towards a bigger deposit and some for anything that needed doing to a new house.

My question is, when do you start looking at houses and making offers? I’ve seen a couple of threads recently where sellers want the buyers to have already accepted an offer on their property before making an offer. Does this mean we’d need to wait until the flat is sold to make an offer on a new place? And if so, what happens if it takes us a while to find something we like?

My other question is, if we wanted to use some of the gifted money from the sale of the flat towards a deposit, is this possible? And would we need to wait for the money to be transferred before we could use it to buy somewhere else?

OP posts:
milienhaus · 09/07/2020 16:33

It sounds like the mortgage and ownership of your current house is in your DP’s mums name, is that right? If so you’re essentially renting so no need to wait until the flat is sold from an estate agent/lender/seller point of view as long as you don’t need the money from the sale of the flat to buy.

If you do need it, I imagine you’d have to wait until the flat is sold and DP’s mum gives you the money since it’s not in your name but I’m not an expert at all!

milienhaus · 09/07/2020 16:34

The problem will be if you can pay for both at once of course, or whether your DP’s mum would mind you not paying her mortgage any more if you couldn’t!

arethereanyleftatall · 09/07/2020 16:39

Yes, you need to be in a 'position to proceed' before a potential vendor will consider an offer from you. No harm in having a look around in advance.

Original poster
FizzyPink · 09/07/2020 16:39

Yes sorry to clarify, mortgage is in DP’s mum’s name but we pay her the money for it each month and pay all bills ourselves. DP was saving a deposit a few years ago to buy before we met and his mum offered this deal as the flat was empty at the time and it made sense for them both.

She isn’t struggling for money so there would be no issue with us moving out and someone else not moving in for a couple of months.

OP posts:
Hingeandbracket · 09/07/2020 16:40

OP not what you asked but you need to be careful of the inheritance tax treatment of any gift.
www.gov.uk/inheritance-tax/gifts

Hingeandbracket · 09/07/2020 16:41

OP - the position re: offers for houses is different in Scotland vs England Wales and NI. Scottish property law is different.

Original poster
FizzyPink · 09/07/2020 16:42

Thanks for that @Hingeandbracket however MIL is only mid 40s so I assume provided she doesn’t have anything terrible happen in the next 7 years we’d be okay. Although I guess you never know

OP posts:
WombatStewForTea · 09/07/2020 16:46

Yes, you need to be in a 'position to proceed' before a potential vendor will consider an offer from you

Depends on the vendor and the situation. My sister has just put an offer in on a house which has been accepted but not removed from the market yet as she hasn't sold her house. The estate agents didn't want to accept the offer or even put it to the vendor until they said they were prepared to walk away. The new house has been on the market for almost a year with no offers so she's not too worried about waiting.

Personally I thought she was mad to not even having her house on the market when putting it an offer Hmm

BigRedBoat · 09/07/2020 16:53

@WombatStewForTea

Yes, you need to be in a 'position to proceed' before a potential vendor will consider an offer from you

Depends on the vendor and the situation. My sister has just put an offer in on a house which has been accepted but not removed from the market yet as she hasn't sold her house. The estate agents didn't want to accept the offer or even put it to the vendor until they said they were prepared to walk away. The new house has been on the market for almost a year with no offers so she's not too worried about waiting.

Personally I thought she was mad to not even having her house on the market when putting it an offer Hmm

If they haven't taken the house of the market then her offer isn't really accepted - presumably if a cash buyer offered the same amount tomorrow they would take it?
BigRedBoat · 09/07/2020 16:54

@WombatStewForTea

Yes, you need to be in a 'position to proceed' before a potential vendor will consider an offer from you

Depends on the vendor and the situation. My sister has just put an offer in on a house which has been accepted but not removed from the market yet as she hasn't sold her house. The estate agents didn't want to accept the offer or even put it to the vendor until they said they were prepared to walk away. The new house has been on the market for almost a year with no offers so she's not too worried about waiting.

Personally I thought she was mad to not even having her house on the market when putting it an offer Hmm

If they haven't taken the house of the market then her offer isn't really accepted - presumably if a cash buyer offered the same amount tomorrow they would take it?
IntheM00dfor7 · 09/07/2020 17:06

If you buy your mum's house
You won't be first time buyers on the second property

user1478299641 · 09/07/2020 17:07

How about using the gifted money just to make improvements/buy furniture for your house? That way you use the deposit you have already and are chain free buyers, which is very very appealing to prospective vendors.

Original poster
FizzyPink · 09/07/2020 17:25

@IntheM00dfor7 we’re not buying the current flat. We’re essentially just tenants and the landlord happens to be a family member who will give us some of the money we’ve put into the property back when it sells

I think it does seem the most sensible idea is to use our own deposit, potentially on a cheaper house that needs improvements and just use the additional money for that. Or alternatively use it to pay off a chunk of the mortgage once we’ve moved

OP posts:
viques · 09/07/2020 17:27

As far as EA are concerned you will need to be first time buyers with a decent deposit and a current mortgage offer from a broker or BS in place before you start looking, if the figures all add up then you will be in a strong position to move on with a purchase.

Money from the sale of your mums house will only be available to use when she has the sale funds lodged in her bank account, so since that will essentially be on the day the sale is finalised and completed , if you were hoping to buy your property to coincide with her selling hers it would be far too late for you to have access as deposits are needed on exchange, not completion.

As a buyer you need to have your own deposit funds available on the exchange of contracts, so this would mean using the money you have already saved or asking mum to give you money from another source.

arethereanyleftatall · 09/07/2020 17:28

@wombat.
As they haven't taken their house off the market they haven't accepted her offer. It means nothing.

arethereanyleftatall · 09/07/2020 17:28

@wombat.
As they haven't taken their house off the market they haven't accepted her offer. It means nothing.

aloaf · 09/07/2020 17:31

Currently you can only view if your house is on the market but this doesn't apply to you as you're FTB chain free therefore you can view and put offers in tomorrow if you wanted.
If you want to use money from the sale of the flat then yes you need to wait until it has sold.

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