Please help me present ourselves as buyers!

[megafish]

Looking for opinions and admit I'm a bit clueless here.

Background is DH bought our current house just as we were getting together, so I've never been through buying a house. We've paid the mortgage off on our current place and depending on the price of next place we buy, we might have enough to buy our next property mortgage free.

We are looking for a detached house with a reasonably sized south or south west facing garden in a relatively small area. Over the last year only 2 potential properties have come onto the market.

The estate agent asked us about our position, I naively said we have a property to sell and were not currently on the market. This led to one of the vendors refusing to let us view the house. My DH thinks that it's the fault of the vendor of cutting down the potential market, but I'm concerned this might be more of a problem if vendors do not see us as proceedable and we'll be stuck in this house forever.

Should I be presenting our circumstances differently if a potential house comes up? It's possible we could get a mortgage and pay it off once our current house sells. Moving into private rented is not an option we are prepared to do.

Any advice on how best to present ourselves so if something does come up we have a chance to see/offer on it.

@Mildura

You've got 36 months to recoup the additional 3%.

Yes, sorry that's right. You need to file the refund claim within 12 months of the sale. My mistake

An estate agent will understand just fine. If you wont consider putting your house on the market first, you will struggle to get anyone to entertain you. Estate agents are following guidelines to only allow proceedable buyers to do viewings. Vendors wont accept an offer, stop viewings and take their property off the market and wait for you to get yours on the market and sold. Youll hold up chains.
If you are not dependant on the sale of your current property, you will need to show cash deposit and a mortgage in principle to cover the cost of your new property. Another lender may not want to offer you 2 residential mortgages unless you can demonstrate affordability. You are making things really hard for yourself. Just get yours on the market if you are serious about moving.

Another lender may not want to offer you 2 residential mortgages unless you can demonstrate affordability.

They don't need 2 mortgages. The one on their current house is paid off.

Its strict enough in normal times and even more so now as no one wants loads walking around in their house. My mum and dad most estate agents only allowed viewing as house was on market , although also let me view as I was helping them ( as moving near me they were miles away) that was pre covid though , and I viewed so as to see if it was worth my parents looking and could rule them in or out as knew what they were looking for

Also Op what happens if you find the perfect house and yours doesn't sell? You may loose the house , as no guarantee you can get a second mortgage unless you have offer on paper. its a bit of a sellers market in lots of places. Houses round her go quite quickly as not many are selling .

We don't want to be on the market and then find we can't find a suitable property then be pressured into finding our next move given the lack of availability

And that OP is the conundrum that many, many buyers face. You have to sell (I mean accept an offer really) on your home before you can seriously start looking for the next.....but how do you know the right thing will come along? You don’t! That’s just one of the reasons why buying / selling is so incredibly stressful.

Lots of people do what we’ve done which is sell your houses first, move into rented, and then keep everything crossed that the perfect house comes along. You could do that, but I understand why you are reluctant to.

The other option based on the fact you said you’ve paid off your house in full (and assuming you’ve got a suitably sized cash deposit, and a mortgage offer) is to say to EA that you are chain free. You don’t need to say that it’s a second home; just that your next purchase is not contingent on the sale of anything else.

In answer to your original question, I think it’s actually your DH that was a bit naive!

We don't want to be on the market and then find we can't find a suitable property then be pressured into finding our next move given the lack of availability.

That's the reality of buying in a chain unfortunately, the only way around it is to consider renting if you find a buyer for yours. This dilemma isn't unique to you, every seller who needs to sell to buy their next home has this issue.

We loved 3 houses before this one but missed out on all of them because we didn't get a buyer for ours in time, as soon as we had an offer on our home the market was our oyster. There's a reason they bang on about the preference of first time/cash buyers and influence that has on negotiation.

I think I've understood your point, correct me if I'm wrong.

I would say to the estate agent - we wish to view x house, which we have an agreement in principle from the bank to buy it, as a chain free purchaser. We do currently own a property but do not need this to sell in order for us to buy the new house - we are wanting to proceed as chain free. We will be selling our current home in the time, but the purchase is not dependant on selling this house.

I guess estate agents and vendors may he worried you'll then decide to sell after all and things get held up because of that. If you can make it very clear they will be 2 separate transactions, that will put you in a better stead.

Thanks all!

DH is sure that he knows best, and that we can do it his way. Luckily DH's nephew did a couple of years as an EA so can hopefully talk some sense into him.

Interesting. Everyone is in the same position as you OP. Everyone wants to know there's something to buy before they want to sell theirs but actually having an offer does provide a good incentive to really look hard and be serious about buying.

And don't assume that you will be able to sell your place at the drop of a hat if you get an offer accepted on a new place. Unless its a total gem it may take a while - particularly if there is a chain involved. I put my house on the market at the end of August and had a keen buyer. Surveys and searches proceeded. But the sale fell through in late October when their sale fell through after a disastrous valuation on their property. I then had to re-market my place and to try to get another offer - meanwhile the place I was buying was put back on the market. Its all come good again after a lot of pain and heartache but we don't look like completing till end of March. The property I first saw was sold long long ago.

If you do proceed with buying with a mortgage before selling your house be careful about assuming you can just pay off a mortgage once you've sold your house. On most mortgages there are penalties to early payment. I'm not sure if that's what you meant though....

We looked for years before our ideal house came up. Our offer was rejected as ours wasn’t on the market, but they accepted when we said we’d rent ours out. In the event we didn’t rent it out and sold it a year after moving into ours. We incurred penalties on the btl mortgage but it was worth it to get the house we wanted. You wouldn’t need to do that though. You can arrange a mortgage in principle and tell sellers you are not in a chain. A great position!

It sounds like the best thing we can do is get a MIP and combine that with existing funds to present ourselves as second home buyers

It’s never good to start of lying. Especially if you decide to buy you’ll then change and say oops sorry. We do have a house to sell after all, hopefully it sells quickly and you’re not too pissed we misled you into thinking we could move right away.

It sounds to me like you just want a nosey round other folks home and are not a serious buyer and want to work out how to pretend you are so you can get into peoples houses.

It's actually a lot of hassle for vendors to get their houses viewing ready, especially with small children. If someone isn't in a position to buy then they are just wasting everyone's time and effort, and shouldn't be surprised when they aren't welcome to view a property..

If you do buy a second property with the intention of selling the original, and do not sell straight away - DH may have CGT implications

You can only have one primary residence. If you don’t buy and sell in order you will be liable for capital gains. I think it’s 28 percent with a discount per year on how long it was your primary residence

I’d be very wary about presenting this as your second home.

The mortgage for a second home is different to that of a main residence.

In addition if you make your new home the main home then when you sell the current home you get capital gains.

You need to speak to a financial advisor before you go down this absolutely and utterly ridiculous route, of lying to agents and and possibly even a mortgage provider just so you can go look at peoples houses.

Also how long have you both been doing this? You said only two have come up in the last year, but you’ve seen a “few”.

I have been selling my house for the best part of a year and the covid chaos has caused 4 sales to fall through.

I do not now let anyone through the door without the agent having thoroughly investigated whether they truly can proceed with a purchase; not just because of covid, but because people cannot be trusted - 4 times bitten and all that!

Until you actually have a buyer on the cards then I would not let you in to look around. Without the sale you cannot proceed with a purchase.

Estate agents are not allowed to present sellers with a potential purchaser who is not proceedable - this is one of the covid rules.

Estate agents are also pretty fine tuned to bullshitters.

Bluntness She would not be lying.
The OP is actually proposing to get a MIP and use that to buy the new house with, which makes her chain free for the purchase.

And any CGT then due on the original house would only be on the proportion of increase in value for the (hopefully) short time that house had not been the main residence. No CGT on the years when it was the main residence. So the OP wouldn’t necessarily be worse off by holding on to it for a year.

You need to speak to a mortgage broker, though, OP, as what you are really after seems to be a mortgage you can redeem quickly as soon as your first house sells. In effect a bridging loan. You really don’t want to be stuck paying a mortgage you don’t need for years on end, or extremely high redemption costs.

We did what you’re suggesting OP - offered on the (new) house as chain free with a view to selling the (old) flat within the 36 month window to reclaim the additional 3% stamp duty.

It was a one bed flat in a naice area just south of the river in London and pre-Covid it took four sales before we actually completed. Each time we had to chip a bit off the price we accepted as the market had dipped a bit. Just something to keep in mind - without a mortgage on that property it’s probably you might feel it’s easier to take a but if a hit as it were.

So yes, in theory it is possible. This property was a little bit special though, so despite the stress I would do it again to secure this place.

@MedusaElectronica

Bluntness She would not be lying. The OP is actually proposing to get a MIP and use that to buy the new house with, which makes her chain free for the purchase.

And any CGT then due on the original house would only be on the proportion of increase in value for the (hopefully) short time that house had not been the main residence. No CGT on the years when it was the main residence. So the OP wouldn’t necessarily be worse off by holding on to it for a year.

You need to speak to a mortgage broker, though, OP, as what you are really after seems to be a mortgage you can redeem quickly as soon as your first house sells. In effect a bridging loan. You really don’t want to be stuck paying a mortgage you don’t need for years on end, or extremely high redemption costs.

That’s not correct. And why she needs to take financial advise because people post erroneous stuff.

It’s on the total profit from the sale. Ie sale value v what she bought it for. Then it’s discounted I can’t recall by how much, by how many years you’ve lived in the property, a set percentage for each year.

We were in this same situation a while back OP. I've never found an estate agent has asked for a mortgage in principle to allow me to view a house.

We had been looking for quite a while as like you we wanted something quite specific so I'd had a few conversations with a broker to work out what we could or couldn't afford based on whether we sold the house or bought as a second home.

When I registered with agents or called for a viewing I would just tell them my budget is X without selling other house or Y if we decide to sell. This was true, but they never asked for more information or proof of this. And I was always able to view.

As it was we found a house last year to buy before we sold our house. Had an offer accepted because we could have got a mortgage without selling although we would have preferred to have sold first, but managed to then market and sell the first house and tie that up before things progressed with the very slow purchase we are still progressing with. So everything worked out fine for us. It would have been fine if we hadn't sold in time too though, it would have just led to more admin.

The difference perhaps here is that we moved into rented to make it happen, so didn't worry about a gap in the house sale / purchase.

OP maybe when you come to put your home on the market you will realise qhat a ballache it is to get the house "viewer ready". Doing that for someone who isnt even in a position to buy your home is, frankly, a waste of time and energy.

If the houses you are looking for are scarce, then they will go fast. You absoloutley won't be able to do this fast if you haven't even listed your own property.

You will be the most appealing buyer if you have already sold your home. And let's face it, this rare a property, they'll have their pick of buyers.