Property solicitor

[MummytoGeorgie]

I'm on maternity and I miss my work!

I'm a property solicitor, if anyone has any questions I would be more than happy to give some free advice to do with conveyancing i.e moving home, enquiries, searches, title documentation etc (no landlord tenant as that's not my area of expertise).

TIA

@MummytoGeorgie I know Scottish law can be different, especially with property. Thank you for replying though! Enjoy the rest of your maternity leave

MummytoGeorgie thank you so much for your long reply - much appreciated. But the bizarre thing is I have no mortgage, no debts, and took a modest hit on the guide price because I liked the sellers (we live in a holiday hotspot, and they want to live here full time), so I'm ferociously against having to go through some charade because I was generous on price. Also, not crazy generous. Does this happen each time a buyer accepts an offer below the guide price? I'm really interested to know, because I was stunned. We're talking a reduction of 4%! And it was only a guide price after all. Do you think the survey has said it's worth significantly more? But the solicito wouldn't see that would he? Anyhow, I intend to refuse on principle, as in over my dead body etc :)

Good suggestion about a one hour time slot - thanks.

Thanks @MummytoGeorgie. It's only packed up this morning, sods law eh?! I have boiler insurance so have British gas coming tomorrow afternoon to see what the issue is......I hope it can be fixed, and it doesn't need the whole thing replacing! I understand your point about buyer beware, but I did declare in PIF that it was in good working order (which is was), and I also feel a bit bad if I didn't at least try and do something about it, especially since I have insurance x

@MummytoGeorgie, I was just worried it would delay completion or the deal could fall through but I guess we are legally binding now right?

@KungFuFriday thank you! ☺️

@goodbyestranger it's to protect the buyers mortgage lender. It would be a requirement of them to have indemnity in place. It is required on all undervalues being sold and it is very usual practice for the sellers to bear the cost.

Sometimes buyers solicitors do access to surveys if supplied by the buyer. If they didn't see the survey they could still see the market value through the lenders valuation report which is supplied with the buyers mortgage offer.

@areyouhavingagiraffe

Hey, yes contracts become legally binding as at the point of exchange so if they did pull out they would inevitably forfeit their 10% deposit +. So it's not in the buyers interest to pull out. Don't worry about the PIF as you completed it accurately on the date you would have signed it and this problem has just arisen! Hope they can fix it xx

HI MummytoGeorgie I find it incredibly offensive so I am simply going to ask the buyers to pay full price or go without a totally unnecessary indemnity. Their choice. Very interested though: how far below guide price is this scenario triggered by? I 100% refuse to pay for an indemnity simply because I was prepared to give these particular buyers a modest snoop.

Essentially, what reduction of the guide price would be regarded as an undervalue? Is it literally anything below guide price?

@goodbyestranger yes anything below market value would be an undervalue x

@goodbyestranger you could always say to your solicitor that as the price has been reduced or offer accepted £25k below market value that the buyer will have to cover the cost of the indemnity or you'll have no alternative then to resell at market value. I'm sure they will cover the cost of a couple hundred pounds given the reduction. Xx

Thanks yes that's the way I'm moving having read your reply. But a very big grrrr! Possibly principle not worth losing the sale over, on mature reflection :)

I find this quite incredible too, goodbye haveing read OP s responses to you - I never knew that any, even minute reduction (3K even?) triggers this. I'm now also worried about mine, as I've reduced 10K to the buyer from asking price - and then 3K more due to a survey issue. I don't know what the valuation was, but I thought they usually value not fa from asking price.

I wonder OP, how can 5 yrs go past yet the property be still seen as the seller's property? Or do you mean only IF the credtors deanded debts to be paid during the sale, or even demanded the person to sell the houe due to debts? Surely in declaratons anyone could say they aer solvent but they can't guaranteed that to last the 5yrs depending on someone's circs? The mind boggles.
Also if that seller is buying a ew house, which is mostly the case, wh wouldn't bankruptcy co not cease the new house rather than go back to the old one which by then may hae a family living there or be operating as BTL?!

Yes, goodbye I was going to say, let the buyer pay insurance but I think for you it's quite unplesant to do the declaration as if you are presumed guilty, so to speak.

sorry again for the typos.

CatAndHisKit I completely agree. The original premise is wrong: the guide price suggested by an agent may or may not be market value. It's a complete nonsense. That's why I wondered if the surveyor had said the house is worth more than the agreed price. But that's a different thing from the guide price. Even so, with not even the merest hint of bankruptcy, I do find it weirdly insulting to have to make this declaration, even though I realise that some people are made bankrupt through no fault of their own.

I can feel myself about to have a distinctly arsey week with solicitors! (me being arsey to them, then no doubt regretting it :)).

@CatAndHisKit you are correct in that anyone could say their solvent but it's a sworn declaration so if someone was to lie it'd be seen as fraudulent and further steps would be taken.

If for example, you sold a property worth £500k but you sold it for £300k and you have debt of £300k (or within 5 years of sale had that amount of debt) but you downsized and purchased a flat day for £200k the trustees in bankruptcy couldn't claim the full amount back from the new property.

@goodbyestranger the lenders don't review the guide price by the agent they go by their valuation and the purchase price. You may not be bankrupt now but there's no guarantees that you won't be over the next 5 years. The process safeguards the lender for the buyer.

Please be rest assured that this is completely normal and usual practice what is being requested of you xx

Thanks again MummytoGeorgie. I've never ever heard of this though, hence my surprise. Supposing one's other assets exceed the value of the property being sold?

I assume the guide price being talked about is the lenders valuation? Not the EAs asking price. In which case I guess this doesn't come up that often because lenders don't often value property from more than it's sold for.

@MummytoGeorgie I have a quick one - my solicitor sent through draft contracts for the sale of our house. Does that mean our buyer has had their mortgage approved? I was slightly concerned that it might get down valued as they put in a very generous offer! I know their searches haven't come back yet, so it feels a little premature, but exciting!!

@goodbyestranger the process would still be the same xx

@Andthenanothercupoftea every solicitor will send the contract as different times, some before mortgage offer approved to ensure they have it signed in readiness so there's no way knowing re their mortgage but you could check with the agent.

Yes it's very exciting isn't it- hope everything goes well for you xx

I meant, OP that apart from those lying, someone can be truthfully solvent but that may change within those 5 yrs. So is it only if the debt level is hte same as the house value that the insurance is for, or even if debt much lower than house value? I mean so may peple downsize precisely to pay off their debts, but it's rare that debt is as high as the house value.

@MummytoGeorgie

WIth apologies for jumping on the @goodbyestranger query, from the information provided it would not seem to be an 'undervalue' sale.

Original price guide: £650,000
Sale price: £625,000
Reduction from price guide: 3.9%

That's not an unusual reduction, and I'm struggling to understand why this would be seen as an undervalue sale situation.

I think it's not the price guide, it's the surveyor's valuation that's lower than what the buyer is paying. We've all jumped in on this .

Mildura my EA said this morning that he'd never come across anything like it in two decades of being an EA. He was so confused by it that he went off to show it to all his colleagues.

@CatAndHisKit the process is still the same regardless xx

@Mildura when the lender does a valuation on the property they will determine what the market value is of the property. If the property is sold less than the market value then it's seen as an undervalue. If the lenders valuation came up at £650k but it was sold at £625k then it's an undervalue. Estate agent guide price is not what it is based on.

Xx

The buyer phoned this morning and said he's cross with his solicitor too (I thought, I bet you are :)).

My EA says it wouldn't be playing cricket to ask for more now, and actually the buyer didn't jump at the suggestion either.

MummytoGeorgie do you lot hate it when buyers and sellers communicate directly? And do EAs hate it too? Or are you all fairly relaxed about it?

Another one to MummyofGeorgie, if you don't mind:

How does my 'acknowledging' an undervalue impact on the probate of my estate were i to die within the five year period? Neither the buyer nor I nor the EA think anything other than that the buyer has offered on a lovely house in good nick for a reasonable price, which we're all happy enough with. If the probate guy sees that I confirmed legally that I'd sold at an undervalue would this bump up the IHT bill? If so, surely I should ask the seller to provide me with an indemnity in the event of my dying within the period covered by the indemnity which has been forced out of me, against by better judgment but simply to appease the lender and complete the sale? The bill would be £10k higher in the event that the valuation was £650k; £30k if it was valued at £700k. I'm now having serious doubts again, at the implications for me/ my DC (my beneficiaries).