Advice please: cost caused by seller's delay

[moniack]

Hi, I'm a first time buyer in London. BF and I had our offer accepted on a house at the beginning of Dec 2015. We were told there was no chain but the seller was very, very slow with providing legal documents (only got them by the end of Feb and still some outstanding questions). It turned out that there is not only a chain, but a very complicated one with selling two to buy one, family inheritance issues blablabla... The seller said twice that they were going to exchange but then later cancelled because their seller couldn't exchange with them that day. From what the agent told us, they missed the April 1st stamp duty deadline because of their seller's fault. They had to re-negotiate and their seller agreed to compensate for that. It seems that if we pull out now, it's going to leave them over a shit creek without a paddle. But both BF and I are really pissed off, they just assume that we are desperate and never going to change our mind so they would only exchange when it's completely safe for them, not to mention lying to us from the very beginning. We are now thinking of asking for a reduction, not a greedy one, just to cover the last two months rent, something 3k, less than 1% of the house price.

People who have sold houses before, could you be so kind to advise if it's a reasonable thing to do. We can afford to lose the house as we actually budged higher than this current house and the stamp duty thing may cool down the market a little bit now. But I don't want to create bitterness and worried they might accept and then do some damage to the house before they leave. (they seem to be quite selfish people judged from their behaviour).

Thanks again.

They will not want to exchange with you until everyone in the chain is ready to exchange because the completion date is agreed at exchange. If your deal is done before everyone is ready they may end up without a house to go to.

Regarding gazundering, I also agree it is morally questionable in usual circumstances. In these circumstances I would threaten it to push them into getting a move on, assuming you would be happy for them to tell you to F off.

Wow said it much better than me!

Does OP want exchange before the chain is ready?

House buying is stressful. I recall very well the feeling of lack of control over a process that was costing me a heck of a lot of money not to mention other factors such as registering for school places before the deadline etc.

But I must say that you are coming across very aggressively. You refer to gazundering and bullying, both terms you seem to justify in your mind.

There may be very good reasons why you haven't had the full picture from the beginning. And even if they've been deliberately misleading, Have you ever heard the expression '2 wrongs don't make a right'?

And I don't expect your vendor is financially better off today than if the conveyance had gone through before 1 April. Their vendor probably compensated them by the about of stamp duty they now face paying. So they might not have another £3k to give you.

Honestly OP, you'll feel very differently when you next move, having to be a vendor and a purchaser and juggling those balls simultaneously.

My last post might have come across too harshly. Apologies.

I do wish you well with your purchase, and hope that the process is completed very quickly.

To wowfudge

Our mortgage surgery was done at the beginning of Jan, so some 12 weeks. We really tried our best to move as quickly as possible, because that was what they said they wanted at the beginning.

I think you pointed out why they dare to be so manipulative, because's it's a seller's market. And you assume they shouldn't pay to rent, to move, which I think they should be prepared to if they said there was no chain. And yes, "in London market they could find themselves priced out if they sell at the price agreed with you in December then have to look again now for a new place to buy", so they are happy to leave us priced out if their purchase falls through. I very much doubt they can find a buyer at the drop of a hat as lots of potential buyers just completed in March, and even that's the case, then their vendor may well find another buyer very easily, and avoid paying the new stamp duty penalty.

To Bohemond,

Yes we are prepared to forget it if they refuse to reduce, as we budgeted at least 10% higher than the current house, and saw something quite interesting already.

To Peaceandloveeveryone,

Yes I will, especially if I already called up my buyer twice and said we were going to exchange next day!

The buyer shouldn't really be speaking to you, that's usually agreed via solicitors. Sounds very haphazard. I would walk away I think.

Being a FTB does give you a fair amount of leverage in the buying process - how you uses that leverage is up to you and what you feel comfortable with.

It doesn't sound as though this is your 'dream' house - you sound as though you'd be willing to walk away if you knew the vendor was going to continue to feck you about - and 17 weeks is tipping beyond the 'average' into the excessive.

Let's face it, the vendor's problems are not your problems/not your responsibility to fix or pay for - if they can't get to exchange with their vendor at a time that suits you - that's not your problem - as long as you're willing to walk away.

Only you can come to a conclusion on what you're willing to tolerate in order to get this home.

My feelings would be to spell this out to the vendor/and or vendor's EA - are you in direct contact with the vendor?

I would be thinking about saying to the vendor that you are considering your position, that you feel let down that they didn't tell you about the chain, that you feel you are carrying the can paying extra rent when everybody else is just carrying on living in their homes (each monthly mortgage payment reducing their mortgage debts where each monthly rent payment is reducing your personal savings).

I would then ask bluntly for an exchange date (soon) and inform them that at that stage, if they would not exchange, I would either walk away or would want to be compensated for any future rental expenses beyond that date caused by their delays.

If they felt they couldn't go ahead with that, then I'd say, I'll walk away now because, to be frank, if they can't show willingness to that (you'e not asking for retrospective compensation) - it means they have no confidence or faith in their vendor exchanging with them - which just leaves you dangling and paying rent open-endedly.

I do wish posters on this thread wouldn't put words in my mouth!

I don't think they have been manipulative and I haven't said they shouldn't rent, just pointed out the drawbacks. OP you do have to have the ability to put your self in someone else's shoes in these kinds of circumstances.

When you get survey results is not necessarily when you get your mortgage offer either.

The difficulty is that speaking directly to others in the chain can be a recipe for disaster. The parties should be communicating via their solicitors who can give a more accurate update.

To Gazelda,

I totally understand the stress, so for my next move I would definitely empty the house, move to rental, and avoid the stress, and I feel it's my duty if I told people "no chain".

I don't think you are too harsh. I think you give honest opinion from someone in the middle of the chain. And you are right that I'm coming aggressively because I'm angry with them. Eh, I guess I'm quite young (early 20th) and don't know much about the market. We are not given any good reason of the chain situation "change", so have to assume it's a lie from the beginning. But anyone who can think of any please advise.

To Peaceandloveeveryone:

Yes it was done by solicitors, and our solicitor told us they wanted to exchange next day.

evrybuddy - the advice to have that conversation directly with the vendor is poor. Imo that could lead to either a promise to exchange by X date which the vendor is guessing at or an almighty row. The OP should speak to her solicitor and the EA handling the sale and convey how she feels to them.

To wowfudge

When I said mortgage survey done I meant the mortgage company had checked the house and confirmed they were happy to go, and that was the beginning of Jan. Is it what you mean by "mortgage offer confirmed"? (English is not my first language and haven't moved to England for long, so please tolerate me if I sound unclear or a bit strange...)

We tried to put your self in someone else's shoes, but they seemed to be quite indifferent to our cost, uncertainty, and annoyance...I just would't change my mind on the day of exchange just because it doesn't completely suit me, not to mention did that twice.

And we are communicating through EA and lawyers, I didn't mention that just to simplify things.

OP - formally you will have been asked to sign a written copy of the mortgage offer with all the details of the property you are buying and the interest rate, etc. It will have included the terms and conditions too.

If you are from a country where property sales are based on a Roman Law system, like Scotland and much of Europe, I imagine the English system seems ridiculous.

And part of the reason why the vendors seem indifferent to your feelings is precisely because there is no contractual obligation on anyone until exchange has taken place. It is accepted that any party can walk away at any point up to then without consequences other than losing the money they have paid out for surveys, solicitors' fees, etc.

To evrybuddy,

Yes, it's not a dream house, actually we are not very picky about houses so are buying in an area where our budget is well above the average price. Just a bit apprehensive of all this happening again but can definitely afford somewhere else. Now I'm a bit calmed down and do think 3k (two months' rent) is too much. I'm thinking of claiming the rent after they first said they were going to exchange, it hasn't been a month, but we pay rent month by month. Having said that, they may not even want to sell, just totally lost confidence and trust in them.

To wowfudge

I don't know anything about my country's rule and I never bought or sold there. The English system is poor but in my country house price can double in a year, and people gezumping by 50,000 pounds is not unusual. I had more trust in the English system but our seller totally let us down. If they are indifferent because there is no obligation, then why did you say I have to put myself in their shoes?

@wowfudge - evrybuddy - the advice to have that conversation directly with the vendor is poor.

I didn't advise the OP to speak to the vendor I asked the question whether they were speaking to the vendor directly - some people aren't - which allows often slippery vendors to hide.

Whether the OP IS speaking direct to the vendor or the EA is largely irrelevant - the point is - that conversation has to be had - the vendor needs reminding that without a buyer, they won't be buying anything themselves.

Perhaps the vendor IS feeling a bit cocky, that they could get another buyer at the drop of a hat? In the end that is not the OP's concern. Her concern is her housing issue and her desire to start investing in her future as soon as possible. The vendor is not playing ball with her in the OP's desire to do that.

OP - I would not ask for past rent to be repaid, I would point it out but they would never agree to that.

However - I would consider setting a reasonable date by which they must agree to exchange and as part of that agreement, the vendor must accept that if they do not then exchange, you will expect compensation for any rent paid after that date.

If they won't accept that, then you might wonder whether they ever had any ability to exchange or any willingness to exchange - if they kick up a fuss at the sound of that agreement - I personally, would consider walking away - dependent entirely on how much I wanted the house and whether I could find a replacement.

For all you know, they have already lost the house they wanted to buy and are trying to find another while keeping you hanging. People are ruthless liars where houses are involved.

Quid pro quo - they need to be told they don't hold all the cards - and you do not exist to facilitate their life improvement.

OP when I said to put yourself in the vendor's shoes - you and they need to consider the impact on the other parties. I would be very surprised if your vendor wasn't worried they could lose you as buyers. If they weren't, they would just not communicate with you and you would have no idea what was going on with the rest of the chain. You'd just eventually get a call from your solicitor asking whether you were happy to exchange.

For example, our vendors have taken a long time to provide the contract, to respond to queries, etc but we are mindful that they have lived in the house for a very long time and recalling everything needed to complete the necessary forms takes time.

No one should exchange unless they are completely safe to do so. You are sounding very naive, I'm sorry, on this aspect.

You've had your mortgage agreed for 12 or so weeks. That isn't unusually long. Plus what you've paid in rent you've saved in mortgage payments - which in the early years are almost wholly interest and very little capital so your loss (if any) is extremely small particularly if your rent is significantly less than your planned mortgage payments.

If you want to reduce your offer you can of course but you'd need to agree this with your mortgage company as you'll need a new mortgage offer.

Moan at the estate agent and suggest that you're starting to look at other properties - it may inject a bit of urgency. And agree a long stop completion date with all other vendors/buyers via solicitor.

However if you do walk away or the sellers remarket the property because they take umbrage at your gazundering them you will be even further away from owning a home as you'll need to start from scratch, will lose your survey fees and probably have to pay at least some of the legal fees.

Plus what you've paid in rent you've saved in mortgage payments - which in the early years are almost wholly interest and very little capital so your loss (if any) is extremely small particularly if your rent is significantly less than your planned mortgage payments.

Not an accurate interpretation of how it works - as stated earlier in the thread.

Every penny paid in mortgage payments is an investment which will be returned with growth when you sell.

Every penny paid in rent will never be seen again.

People no longer rely on capital repayment as a mean of achieving equity in their properties - they rely on house price inflation.

If you don't own the house, you can't benefit from house price inflation.

Investments can of course fall as well as rise in value.

Actually evrybuddy you're the one who has it wrong. Your presumption is that house prices will always rise. Not the case in the short term at all.

However the OP has been prevented from owning the house for a matter of weeks (in reality) since she believes they should have exchanged - not completed note. Even if they had exchanged she could well have had a longer than typical completion period and have not yet moved in. Assuming however a normal 14 day completion process she potentially hasn't owned the property for a week? The investment value of that period is negligible.

I haven't read the whole thread.

The purchase of my house took a long time (16 weeks) because of the seller not having information and I only pushed it to exchange by paying for two indemnities which covered the loss of two documents. This was more cost effective for me than paying more rent.

I was under the impression that before exchange there is no set time frame for the sale and therefore compensation would be unlikely? Would interfering with what has been done and trying to lower the price cause more hassle? I was always strictly told by my EA, solicitor and mortgage broker not to hand in my notice on a rental property until I had exchanged, there are so many unforeseen circumstances especially in a chain and it is unfortunately a very frustrating waiting game.

As I clearly stated --- Investments can of course fall as well as rise in value.

For illustration and clarity - let's take a £300,000 mortgage over 25 years @ 5.5%

Repayments are £1842 per month approx

Total amount to be repaid £553,000 approx

Every £1842 the OP pays in mortgage reduces the total debt in real terms. It comes off the £553k.

Whether that reduction in the total amount to be repaid is in the form of interest or capital is of no matter as the total amount has to be repaid regardless. (if you keep until the end of the term)

The OP is paying approx £1500 per month in rent. She will never get one penny of that back.

Her actual loss is not negligible - it is the investment value of £1500 per month - the amount of rent that could be being used to pay down her mortgage.

But surely that's all hypothetical? As you don't legally own the house or have any ties to it until you've at least exchanged contracts?

I've heard of sales that go on for months before exchange, it's annoying and costly for everyone involved but the system would surely collapse if we could all receive compensation or reduce our offers because we had missed out on investment?

I don't think anybody thinks the vendor will actually compensate the OP for rent.

They will either get their fingers out and exchange under threat of losing their buyer or look for another buyer.

The OP's point is however, that she is suffering a 'real' loss by renting over buying.

And of course she is - that's why I, and all of you people on here have bought houses - because rent is money down the drain - so why is everybody arguing the opposite now, eh?

Of course she is suffering a real loss and it is the amount of her rent every month.

If she had £10,000 in the bank in January and paid 6 months rent then in June she will only have £4000 in the bank.

If she bought a house for £300,000 in January and paid 6 months mortgage payments then in June she will have reduced her Real Total Mortgage debt by that amount.

Even if house prices don't move.

If they go up she will make a profit.

If they fall - well, if she wants to sell at that very moment, she will have suffered a loss.

But rent is a total loss either way.