Wait until the seller has mortgage offer before instruct my solicitor?

[tenapenny2018]

My own mortgage is already approved and the seller's solicitor sent my solicitor the draft contract package. I have not paid/instructed my solicitor to search yet. The seller only has an AIP at the moment for her own purchase.

I just wonder if it is reasonable to tell the seller that I will wait until she has her own mortgage formally approved before I would instruct my solicitor to do anything?

I come to realise that there are a lot of people lie overestimate about how much money they have or can borrow; and they fall at the first huddle when the lenders scrutinise their financial circumstance in more details, and it's impossible to tell whether someone actually have the money or not just by their looks!

Have you been particularly badly burned by this in the past?

It's just my opinion but that sounds quite delay-ish and obstructive to me. We've always been keen to speed things along, not put blockers and delays up at this stage. It can be interpreted that you are not committing to the sale. You are essentially casting aspersions on their finances and honesty before you've even started. If it really hacks them off they might respond by putting the house back on the market until you have instructed your solicitor.

Personally I think you need to jump in with both feet at this stage. Demonstrating your commitment to the sale helps to push it through. Of course there are no guarantees.

Couldn't you just ask for proof of funds for deposit and proof of an AiP?

Oh sorry I saw they already have an AiP. In which case I wouldn't be worried but maybe I'm naive!

I disagree with DrWashout. I think that is a fair precaution in the current crazy market. Why should you be out of pocket if they can't secure a mortgage. Mortgage approvals used to take a matter of hours or days now they are much more thorough and are taking weeks. In the meantime you could have racked up a big solicitors bill. hi

AIPs are granted based on uncorroborated information supplied by the applicant. It is not unusual for there to be large discrepancies between what they say and what they can prove to the mortgage co.

If your sellers throw a strop at this early stage, then maybe a lucky escape.

DrWashout Yea, in previous sale, the seller pressured me to go through my side of conveyance process. I basically was ready to exchange after 4 weeks, only for seller to then sit on their hands for 8 weeks and then pulled out. Cost me over £1,200 in abortive cost. I got on well enough with the seller's agent. Afterwards they told me (because they are frustrated too for doing a lot of work for nothing) that the seller had not being straight about his financial position and it transpired that he couldn't proceed anyway. They told me it is actually quite common and if it wasn't for the factor that they worked for the seller, they would advise me to wait, too.

Belleende Yes, that's my worry. Looking at my own case, my mortgage is just about 20% of my monthly net income. I got AIP on the spot like everyone else. What surprised me is when I actually went through mortgage interview process. In addition to proof of my income and saving, they added assumptions about additional expenditures of people like me in similar circumstances, regardless whether those assumptions are relevant to me or not (because a lot of people, even with good incomes, actually have no idea how much they spend each month). They then also tested 10% mortgage interest rate and worked out that although it would get uncomfortable, I would still have some money left each month. And that with me putting down more than 40% deposit.

Mortgage in principle andproof of other finance is all you need to proceed. Very few people have a full mortgage application approved at this stage because you don’t know purchase price/ what yours has sold for. I’d be pretty annoyed and possibly pull out if my buyer did not instruct the solicitor/ arrange a survey in this situation

I don’t think it’s an unreasonable request. It doesn’t take that long to get a mortgage in place. But many people might disagree and read too much into it. If you are ok for it to go pear-shaped (and I would be), then go for it.

When you say your mortgage is approved, do you mean you have a decision in principle, or an offer?

If it's an offer, have you checked the expiry date? It would be an issue for your buyer if you held out for weeks/ months, started the conveyancing, then had to reapply yourself. Some offers only last for 60 days.

Personally, I would pull out/ remarket if a vendor/buyer waited for me to get an offer before starting legal work. Everyone is working on trust prior to exchange; dragging your feet just suggests you aren't serious about selling and I would take that as a red flag. We waited a month for our current vendors to return the sale paperwork to their solicitor... by that point, even their own EA was calling and asking them what they were playing at.

If they have an AIP/ DIP, your EA has presumably checked it. That is the best anyone can hope for. And even if their failed to get the first mortgage they applied for, there is almost always a plan B.

Daisy2990 I am the bottom of the chain. I have a proper mortgage offer. Offer expires at the end of 31st May. It cost me £1,000 up front fee to get the mortgage arranged. Personally, I think that actually shows more serious commitment than instructing conveyance, which doesn't actually cost much up front.

Yes, we all would like to trust, I would as well; but the reality is that AIP is basically self-certified and statistically 1 in 4 agreed sales fall through for various reasons.

Anyway, the seller actually got their mortgage offer after a week, so wasn't much of a delay.

If everyone in the chain does this then the chain will just drag on forever. Your bottom of the chain, the foundation. Literally everyone else is relying on you to keep your side of the bargain. Instructing a solicitor/searches is part of that.

I'd re-market if someone did this to me. CBA the drama

I'm going to say Yabu here if there is a DiP in place.

My chain of 4 was so horrendous my mortgage offer almost expired and I never got it formally agreed until confirmation the chain was complete.

If it had expired, it would have been £1,000 mortgage arrangement fee up the shitter and another £1,000 to get it re-done or pay all the sol fees etc for pulling out which was 80% of the total cost due to how far along we were.

If you insisted that I have a mortgage in place, I would demand via a solicitor that if the chain collapsed or the 6 month window lapsed and I had to be re assessed you would have to pay me the arrangement fee. If you didn't I would walk away.

Our solicitor wouldn't even look at our file until mortgage offer had come through (buying only). Obviously that was to protect them from working if we weren't proceedable, but I don't see that it would be unreasonable for you to stimulate the same of the seller.

Incidently, getting the mortgage offer took longer than All the rest of the process (various reasons), so maybe consider your timescales before you insist on it.

That said, their mortgage arrangements are really none of your business, assuming it doesn't hold things up, so I don't think they would be unreasonable not to share either.