Buyers don’t have money for stamp duty

[PrettyFox]

In the process of selling and buying. 9 weeks in and process has been smooth so far, everyone collaborative and it looked we were ready to exchange this week.

The buyers own a flat that they were not intending to sell for now and were hit with the recent increase in stamp duty rate for 2nd properties. They claim they don’t have the money to pay the difference (approximately £9k) and their suggestion is everyone else to wait for them to sell the flat.

Estate agent say they are not open to ask for loans. I suggested then they decrease the deposit amount and increased the mortgage amount, same dismissive answer from the agent, “this is not something they are open to do, it will likely change their rate etc etc”. I find very unlikely that £9k added to the mortgage would have a very significant impact in their eligibility, interest rate or monthly payments, or am I missing something? They would need a new product but surely worth to explore with their broker if it could save us all time?!

Feeling quite pissed off over this as the buyers can get a tax refund if they do sell the flat in the next three years; or potentially can even maintain two the properties depending on their final monthly payments and rent they will be getting from the first flat. It’s seems to me a very privileged position where they just have to find a short term solution but won’t be losing money in the end. But the estate agent kinda suggest that the only option is to wait! I lost my patience today and said that isn’t reasonable.

I really want the house we are buying and spent £££ in the process but I’m not comfortable at all with how passive the agent is and how our buyers, who are the ones with less to lose in the entire chain, seem unwilling to try and sort a solution.

What would you do? We received several offers for our property but we had two first time buyers changing their mind early on the process, so we do feel quite disheartened with the idea of going back to the market.

Sorry for the long post, just needed to vent, feeling very sad about this…

I hope these aren't your buyers 😬 The general consensus is they need to find the money, not pass it up the chain.

www.mumsnet.com/talk/property/5200054-what-would-you-do-new-stamp-duty-rules?reply=139499074

I have been following that thread religiously! I’m assuming there will be loads of people in the same circumstances this week following the budget…..

It's one thing to "help" out if it will be their only home and it keeps the chain from falling apart but I personally think its incredibly greedy of those wanting two homes especially since they could get the tax back in 3 years but those in the chain wouldn't see a penny.

So they were going to hold onto the flat, but suddenly over the sake of £9k that has changed and they want everyone in the chain to wait so they can sell it?
I call BS.
If they haven’t yet listed the flat for sale then that’s going to be, what, a couple of weeks to get it listed then minimum another 3 months assuming they get an offer quickly. By which point everyone’s mortgage offers will be headed for expiry?
Why would they be adamant they wanted the chain to wait if they knew they could get the tax back anyway if they sell within a couple of years? Is another £9k really going to torpedo their existing mortgage deal (if so presumably they’re right at their limits of affordibility). Are they hoping you’ll go “oh poor buyers, knock the £10k off”?

We had this when the stamp duty holiday in covid came to an end. Our buyers asked us to reduce price as they missed the deadline and we said no. They came up with the extra.

If they want your house they will find the money. I would put the house back on the market and if they get an offer on theirs, and yours is still for sale, they can come back and offer again.

I agree with Wallace, give them a (short) deadline to confirm they will proceed without selling theirs, and if they don't you will put yours back on the market. If you find a new buyer with nothing to sell I'd go with the new buyer.

Funnily enough they haven’t asked for any reductions, just that everyone waits for them to sell. You summarise my thoughts and worries - not only mortgage offers can expire but there will be an increase of stamp duty from March too, which I’m of course keen in avoiding.

The straight rejection of my suggestion today was really odd! As you say, £9k added to a mortgage deal over several years (they are young, so I imagine they have a very long term deal) is nothing! We don’t need to receive their full deposit to pay ours so it seems to me the easiest solution to meet the shortfall. But the agent was so dismissive that I thought I was suggesting something very unreasonable

They can find the extra £9k or bugger off, there will be plenty wanting to buy before the stamp duty rules change generally so call their bluff.

If you were to wait for them to sell you may as well put your own house back on the market and wait for that to sell. After all, you know for a fact that you received several offers for your property but who knows how long it might take them to get an offer? At least you are taking control and can vet the offers you receive to try to pick the one most proceedable.

I would say proceed or we are relisting. I strongly suspect they will be able to find an extra 9k if push comes to shove, but of course there is no guarantee of that so if you say it, you have to mean it. Sorry this has happened to you.

It is quite hard to believe that someone who can afford 2 houses can't find an extra 9k somewhere. Especially when you consider they could get a refund if they sell the first one within 3 years. I strongly suspect it's not that they can't find the extra money but more that they don't want to.

I would say if they insist on putting their flat on the market yours is going back on the market and if there’s a more proceedable offer (ie not needing to sell or further along in the process) then you will go with them

I would say if your agent cannot broker a deal this week, then re-list. It doesn’t sound like your buyers would be good sellers if they are so precious over 9k (ok that means you need to earn or repay 15k to get the 9k, which is not nothing).
However if it was me, I’d definitely try to reach a deal, rather than risk possibly months more on the market or more importantly losing the house you want. There is so much shyte for sale, could be a long wait for the next one. Or the next one might need an extra 9k spending on it. Good luck!

In my experience most people buy as close to the limit of affordability. The idea that they can just find 9k is laughable. That said, it's not your problem, and I wouldn't wait for them.

I'd put it back on the market. Tell them if and when they sell their flat they're welcome to come back. May sharpen their minds a bit.

With your first and only home maybe, but this is someone rich enough to afford to buy a second home we are talking about. This is not your average buyer.

9k is an amount they could put on a credit card if can't raise it any other way, & repay once the first house is sold.

Simply this.
You will proceed with the buyer who can move the quickest. The searches etc can be sold to the another buyer to speed things up. So whilst re listing is a pain you can also instruct agent on having serious buyers only. You never know !

How is it greedy.

Life isn't charity and amount making the financial position of people don't even know better,

Blame Rachel reeves.

£9k is a huge amount of cash to find overnight!

I’d simply say you will relist. If they manage to sell before you do then great otherwise you will proceed with the fastest buyer. Either way a property needed to be listed and sold so you might as will make it yours!

my hunch is they want you to offer to cover the £9k because you want to move asap.

as it’s a flat they are trying to sell then they often take much longer to sell due to ground rent services charges and management cladding
your mortgage could expire in that time

and what happens if the people buying the flat have something to sell as well

i would refuse to get into a deal with people like this and walk away and relist

As @Cornflakelover said, flats take longer to go through the whole process and that’s once they have an offer, it could take a long time for that, very likely much longer than it would take for you to find a new buyer.

It's not just as easy as going back to the bank and saying £9,000 more please.

£9,000 could easily change their LTV which could push them into a higher interest rate.

If it was me I'd put the house back on the market and see if you can find another buyer.

I would call their bluff and say you are putting it back on the market. If that really want it they will find a way.

Think about it this way- if at the very start of the process they made an offer with their property still to be sold, it would have been considered an offer that couldn't be progressed. Your estate agent wouldn't have taken your home off the market at all, as without their flat being sold, they aren't actually in a position to make an offer. So hanging around now, waiting for their flat to sell with your property off the market, seems like utter madness.
The how and the where of how they find that money isn't your responsibility, you just need to secure the best possible outcome for your families future. You don't know anything about their financial circumstances so it's impossible to second guess. Relisting will either find you a new buyer, or put a bit of pressure on the current ones to restructure their mortgage Vs deposit, or secure a loan etc.

I would tell my EA to put the house back on the market & actively market it TODAY & be checking they had

I'd also make it clear that his commission was coming from the sale of my house & he was jeopardising the whole chain

The buyers are CFs who want a reduction in price to cover the stamp duty increase

They are playing chicken with you.

Don't blink.

Highly likely they will find the money. If they can't, you're no worse off having to go back to market.

Absolutely no chance would I agree to pay a stranger nine grand, which is what they are after.

Love the way you phrased this!