Are we able to get 'first refusal' on a house which will be coming onto the market?

[RebeccaH879]

Have also posted in property but actually realised it is probably better here - sorry for the duplication.

We would like to buy a house in a very sought after village near us. The owner of the house is a family friend, very elderly, very practical and sadly very unwell. At the moment they are 'getting their finances into order' - having their house valued etc - as I said, they are eminently sensible and organised and still mentally sharp. Their estate is going to be left to charity and they did draw some of the equity out of their house a few years ago.

Are we able to approach them and offer to pay for first refusal on their house? Obviously we are expecting to pay the market value. I wouldn't even consider asking this if I thought it would distress or offend them. I actually think they might be quite pleased that their home would be lived in by a young family that they know.

Clearly this is all hugely distasteful and mawkish but does anyone know what the legal position is in this sort of situation? I think essentially the bank will be owed money because of the equity release years ago but there will be equity still on the property which will go to the charities.

Thanks.

You might consider offering a mutually acceptable non-refundable financial consideration for first refusal?

Money usually talks.

Yes it does!

This may sound overly complicated but could we release equity from our house and use it to effectively buy the 'loan'/equity release for the house the bank?

from the bank? That way we will already partly own it?

Again, all this only if acceptable to the owner. I'm being pro-active not wishing the owner into an early grave...

I've released equity (remortgaged) one house to buy another. You can remortgage for any reason as long as the bank says there's enough value in the first house and you can make the repayments.

I would talk to the owner and sooner rather than later. If you're prepared to pay market value then they may be keen to sell before they sign up with an estate agent and avoid fees.

And if the person is still alive isn't the charity irrelevent at this stage? She/he will need to keep the money incase they need it for care home fees.

Never heard of that to be honest.

Are you sure the house isn't also going to the charity? If it is, they will put it in the market asap. Then you will have as much chance as the next person of getting it.

If it is going to a charity you could ask if you could have first refusal in return for a £250-£500 donation? If you get the house £500 on top is nothing in the big scheme of things

If after remortgaging house one you could only part buy house two then you'd end up with a mortgage on each. Which could be complicated. I'm not sure what the bank would say. People do it but normally with house two on a buy to let mortgage. One option if you have a partner is to have one house in one name and one house in another name? You'll have to talk to the bank and see what they allow.

I think someone at work did similar recently as they bought a new house before they sold the old one and had a mortgage on both, so some banks must do it. I guess as long as you can make both repayments it should be fine.

The money from the house is going to charity. I just don't think an elderly unwell person is going to be the slightest bit interested in selling a share of their hOuse to a stranger. If that was even legally possible.

But they're not strangers!

I'd personally write a letter, outlining your thoughts and reasons for wanting the house - family home, children going to school etc. They may find the idea comforting and if they don't they can ignore your letter.

I don't know re the financial/legal sides

We're not strangers. We are family friends. Everything is going to the charities. They don't have a mortgage just the money they got from equity release I think.

Throughthickandthin - you seem very aggressive about this, we're not trying to fleece a helpless old person. We're trying to find out if there is a legal way (for us and them) for us to buy their house when they die without going through estate agents and the usual bun fight of buyers, that's all.

Sorry I'm not intending to be aggrssive, I just cant see how it can work. And if they aren't particularly bothered who lives in their house when they are gone then it will be more hassle than it's worth from their point of view trying to organise that whilst they are alive and ill. If you are close, and If they would love you to live there then that's great.

The simplest thing would be for you to buy the house now and charge them a nominal rent or something. Good luck with it.

Thanks thickandthin. Unfortunately we can't afford to own two houses otherwise that is exactly what we would have done!

Are you close enough to know who the executor of this person's will is going to be?

It is the executor who will decide these things and that person has a legal obligation to get the maximum value possible for the estate. This would normally mean that the house must be available on the open market to ensure it gets the best possible price. However, a private sale can also be to the estate's advantage as it would then avoid the 2% estate agents fees (and in some cases other expenses - my own house was sold to us by the executors of the estate of the previous owner, and they had spent several thousand pounds from the assets of the estate to bring it to a saleable condition before marketing it).

Isn't it a bit odd to be getting the property valued now? An estate agent's valuation has no legal status and is often wildly inflated from the true value in order to entice their customers. An independent valuation is a paid-for service but a valuation carried out now would be invalid in a few months time or whenever the executors are ready to apply for probate as the market can be so volatile.

Could you write a letter like this:

To whom it may concern:

In the event that [address if house] is at any time in the future to be sold, I wish to register my interest in purchasing the property and hence allowing the eventual sale to avoid estate agents' fees and other sundry expenses of marketing.

I am willing to pay for an independent valuation and then make an offer of that amount plus 0.5% in order to ensure that the sale is guaranteed to be achieving the best possible result for the seller.

If at any time this offer is of interest I may be contacted at [address/contact details]

Yours faithfully
Rebecca H

That letter is really nicely worded.

Thanks fish! That letter is excellent. I know what you mean about the estate agent valuation - the owner has organised it, I think just out of interest. Lots to think about. I think it might be worth asking a solicitor too.

Just realised you said that she has released some equity? If an equity release company have a claim to a percentage of the profit it could throw a spanner in the works (or did she do it via her bank?)

As far as I know the equity release was done by the bank helpfulchap.

I think what you propose is doable. It is called an estate contract, and you'll need to register it at the Land Registry. It will need to be created by deed, and financial consideration is not necessary.