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Original poster

Is a mortgage in principle enough to get the balling rolling?

29 replies

Penfield · 04/10/2021 14:05

Is it enough to start the ball rolling for our buyers to get started on buying our house?

The offer was put in at the end of July. We found somewhere to move to in August. But our buyers still have not had a proper valuation done.

Is a proper house valuation necessary? Or is a mortgage in principle enough to get them started?

OP posts:
JackieCollinshasnoauthority · 04/10/2021 14:12

Is the chain complete?

They could have received a mortgage offer based on a desktop valuation, meaning nobody will have had to physically visit the house.

It's likely they would want a survey for their own purposes.

How far down the line are you with your onward purchase?

Original poster
Penfield · 04/10/2021 14:27

The chain is complete - as in we are in the middle, we have a buyer and we have somewhere to buy - so there's just three properties in the chain.

My real issue is that we're ready to go ahead and solicitors are instructed etc - but we don't want to pay for searches until we're sure our buyers are actually serious.

Same estate agent is carrying the whole chain. All 3 properties sold by same agent. They are saying that we're going too slowly and holding things up. We're saying we want our buyers to get the mortgage valuation done and then instigate their searches before we start ours on the property we're buying.

Is that unreasonable?

Estate agents says that our buyers have a mortgage in principle so mortgage valuation is nothing to worry about ...

Is that the case?

And EA says buyers have started their searches (which we don't believe). How can be check if this is true?

OP posts:
TakeYourFinalPosition · 04/10/2021 14:32

It’s because you’re asking for a valuation that you’ve confused people. That suggests you’re worried that your house won’t be worth enough. As a PP said, they might not need a valuation - their mortgage lender would decide; they might be happy with a desktop one.

It’s not unreasonable to want them to get started, although they may think the same about you… but you do need to phrase it right. You don’t want them to get a mortgage valuation; you want them to submit their formal mortgage offer.

Searches would be done by their solicitor - have they instructed? Typically, those are the two things that show commitment - applying for the full mortgage offer; and instructing the solicitor. They’re then committed, as the solicitor will almost certainly want payment on account to get started.

If your buyer has instructed a solicitor and applied for searches, it’s probably time for you to get moving too…

ChicChaos · 04/10/2021 14:40

So you are the middle of the chain and won't do anything until everyone else has their paperwork sorted? I don't think that's reasonable, the searches can be done at the same time as everyone else.

Original poster
Penfield · 04/10/2021 14:41

Ah - thank you. We are so in the dark about all of this. We have no idea what to do - and no one explains anything. So your post is really helpful - thank you @TakeYourFinalPosition

OP posts:
Original poster
Penfield · 04/10/2021 14:48

Our buyers and estate agent are saying that the buyers are trying to get a mortgage valuation. They've been 'trying' to do this for weeks now. I presume this has to be done before a formal mortgage offer can be made. But it's taking a very long time.

We are worried that our house might not be worth what's been offered as lots of work needs to be done on it. If we don't get the amount that's been offered on our house we can't afford to buy the house we've made an offer on. Does that make sense?

That's why we want our buyers to have the mortgage valuation (which is their wording/not ours) before we pay for the searches.

OP posts:
Orangecrisp · 04/10/2021 15:06

Have they made a full application? If they have I would be chasing up where they are at with their offer eg have they passed the underwriter stages. A mortgage in principle is good but doesn’t necessarily mean they will get an offer, especially as you can apply for one online and not be entirely truthful about the income etc in it.

ballsdeep · 04/10/2021 15:08

I was thinking the same. If I was above you in the chain I'd be very worried that no searches had been instructed after an officer in july!

Piranesio · 04/10/2021 15:13

Why don't you believe the buyers have applied for their searches? It's usually the first thing people do.

It does sound like you are holding things up tbh. I can't believe you are being so ridiculous about £250.

Orangecrisp · 04/10/2021 15:15

OP are you buying and selling in a hot area? I would be more patient with you as a seller if you had started searches etc. Have you considered that by putting this off you are giving the seller no incentives to wait for you to find a new buyer, should yours not be able to get a mortgage?

Chains have people dropping out all the time however if you are somewhat progressed most reasonable buyers/sellers would prefer to wait for you to find a new buyer than remarked as it’s usually quicker. In this case they may as well put it back on the market.

Original poster
Penfield · 04/10/2021 15:19

*Why don't you believe the buyers have applied for their searches? It's usually the first thing people do.

It does sound like you are holding things up tbh. I can't believe you are being so ridiculous about £250.*

Ok- I've paid it now.

The reason I don't believe the buyer has paid her searches is because she hasn't got a mortgage valuation done yet? Wouldn't you do that first?

OP posts:
Orangecrisp · 04/10/2021 15:28

I think you need to contact the EA and ask:

Has she submitted a full application?
If so has the valuation been done?
If so when/will she be booking a survey?
Has she paid for the searches yet?

If the EA can’t give a good answer on these I would be remarketing.

Original poster
Penfield · 04/10/2021 15:37

Ok - I'll do that tomorrow @Orangecrisp

She put the offer in in July. EA says that searches have been paid for.

I'm confused.

Thing is it's the same EA that is dealing with both ends. Every one of the chain (only 3) is being dealt with by this same EA. So it must be in the EA's interest to be sure the buyer is serious.

We've made it very clear that we can't buy without selling first.

OP posts:
Orangecrisp · 04/10/2021 15:42

Not everyone waits before paying for searches, I never have done but I’ve always been 99% confident there won’t be any issues getting the mortgage.

It sounds to me like she’s having trouble getting the mortgage progressed to valuation stage which might mean there are questions around her affordability. I’m speaking from experience of having two buyers with AIPs who then couldn’t actually get their applications past underwriter. In this case they were self employed and the lender obviously had issues with how they had calculated their income. It wasted weeks of waiting for them and I wish I had just stuck it back for sale, when I did I sold again the same day.

greedygut · 04/10/2021 15:50

Sounds like your buyer is cracking on and waiting for the searches to come back , you need to get a move on , sounds like you are holding things up , talk to your agent , ask them to spell it out ,they are used to dealing with people that have little knowledge of the process, ask them what progress everyone in the chain has made and what you can do to speed things up , I had a 3 chain this summer and it only took 7 weeks start to finish

ChicChaos · 04/10/2021 16:03

Most people need to sell before they can buy, the EA will be used to that. Some conveyancers do the searches last but you always have to pay for them upfront - the last time we bought a property I asked the conveyancer if she'd do the searches first but she had her own order and stuck to that!

You could ask if the mortgage valuation/survey for your buyers is going to be a desktop one or if they will send someone round to inspect your house - EA might not know but it would be worth asking if that's the element you are worried about. Hope it all runs smoothly from her, OP, it is a very stressful time.

NotDavidTennant · 04/10/2021 16:11

A mortgage approval in principle isn't really worth very much. They can still be declined when they put in the full application.

Piranesio · 04/10/2021 19:54

@Penfield

*Why don't you believe the buyers have applied for their searches? It's usually the first thing people do.

It does sound like you are holding things up tbh. I can't believe you are being so ridiculous about £250.*

Ok- I've paid it now.

The reason I don't believe the buyer has paid her searches is because she hasn't got a mortgage valuation done yet? Wouldn't you do that first?

Nope, I applied for searches and my mortgage in parallel. I would wait until the mortgage offer is in before booking a survey though, that is where things get expensive!

Having said that, I live in an area where searches take weeks. If you are lucky enough to be somewhere where they are 48hr turnaround, then I can see that you'd have more time to play with

Starseeking · 04/10/2021 21:08

What you really need to know is what stage your buyers have reached in the process of securing finance for their purchase.

At the lender I have just received a mortgage offer from, the valuation is the very last thing they do in their (very) long application process.

Due to moving because of a recent relationship breakdown, and although I am in a very good permanent job, my lender wanted me to jump through all kinds of hoops because of their own stress testing. This meant it took 12 weeks from having my offer accepted by the vendor to receiving my mortgage offer, as there were many steps in between.

I commissioned the searches in parallel, and also had to put my solicitor in funds before she started work. This meant the vendor knew I was serious. If you buyer has done nothing other than obtain an AIP, I'd be asking more questions around proof/source of funds, rather than focussing on the survey itself.

Original poster
Penfield · 04/10/2021 21:36

Well this afternoon I paid for the searches. Half an hour later an email came through saying that our buyer was having to carry out overseas deposit checks which could take up to 10 days. After this they will carry out the valuation!!!

This is the valuation that has been pending for at least 4/5 weeks now.

The offer was made on our house mid July.

Does this sound dodgy? Or nothing to worry about?

OP posts:
Original poster
Penfield · 04/10/2021 21:37

Sorry it’s the buyer’s bank who are lending the mortgage who are carrying out overseas deposit checks.

OP posts:
Original poster
Penfield · 05/10/2021 08:46

I wrote this last night - just to catch the morning traffic am reposting:

Yesterday (Monday) I paid for the searches. Half an hour later an email came through saying that our buyer's bank was having to carry out overseas deposit checks which could take up to 10 days. After this they will carry out the valuation!!!

This is the valuation that has been pending for at least 4/5 weeks now.

The offer was made on our house mid July.

Does this sound dodgy? Or nothing to worry about?

OP posts:
Piranesio · 05/10/2021 09:29

Sounds like your buyers are using money for their deposit from an overseas bank account. If they aren't from the UK, then this is entirely normal, although this will obviously slow things down.

Your buyers might have the money, they might not, but you can't know this until their mortgage offer comes through or not. Equally, you can't sit there and do nothing on your purchase until they get the offer, that's not how chains work. All parties take the risk and that's why chains can be unstable. But it is the only way to make sure that moves can happen in a reasonable time frame.

Your EA should have done affordability checks on your buyer before you accepted the offer. Did they?

Original poster
Penfield · 05/10/2021 09:36

Your EA should have done affordability checks on your buyer before you accepted the offer. Did they?

They must have done. They did with us and it’s the same estate agent.

Forgive my stupidness - but the offer was made in July, for our house, we found somewhere in August. We’ve been asking the estate agent to get things moving with our buyers and they’ve been saying a mortgage valuation would be done for over a month now - why is the bank only now validating the overseas deposit?

Does this really need to take 10 days?

It’s not actually transferring money, just validating it. My point really is why is this only happening now?

OP posts:
WhyMeLord · 05/10/2021 13:38

Banks are sometimes slow.

We were buying a house last year that fell through and from mortgage application to offer took less than 48 hours (desktop valuation)

The house we've just moved into from making our offer to moving in took 11 weeks, from putting in the mortgage application to offer took 9 of those weeks (also a desktop valuation). If we'd have waited for the offer we'd have doubled the overall time it took to complete.

After they have made their application its largely out of their control how long the offer takes to arrive or where in the process the bank does the valuation. It's frustrating when you're worried about everything going through ok.