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…

Frankly, your EA sounds shit.

Your EA sounds like the average “stick the house on Right Move and hope it sells” agent, who doesn’t want to do any other actual work to earn their commission.

The EA should be talking with the buyers and putting various suggestions to them as to how they can still proceed without holding up the whole chain, not acting as if your suggested solutions are ludicrous.

I’d tell the EA to get your home back on the market today, then at the end of next week I’d ask them provide me with an overview of what exactly they’re doing to actively market your property.

Get that agent working on negotiating a deal, at least for this week. The chain is complete. If the house goes back on the market, it might go for £10k less, or not get any offers (ok, likely to be another spring feeding frenzy due to SDLT), or fail before the next exchange, or rates go up, or the upward purchase is lost.
I search RM religiously, and I see maybe one decent/acceptable house a month come up for sale, in a good sized search area (Fylde Coast) The rest are run down and/or overpriced.
Regardless of how distasteful it appears, a few k lost now is worth it to get your dream house. You could try to split the difference downwards and upwards, costing the OP only a couple of grand.

BTL properties are second homes. It doesn't matter if you rent it out or use it as a holiday home.

The only way they could avoid this would be through owning the other home through a limited company (but they would still have to pay higher stamp duty rates for that house).

You cannot just add stamp duty onto the mortgage. It has to be made as a separate cash transaction

I agree with your comment that it’s not for you to resolve this so don’t. The estate agent can earn their keep and try to sort it.

If I was you, I’d set a deadline for a decision and re-market if they can’t find the money for all the reasons mentioned already. You’ll probably be able to find and sell to a proceedable buyer quicker than they can sell their flat. We sold a one bed flat a few years ago and it took 8 months to get an offer!

They’re in the incredibly privileged position of being able to own two properties, a position most people will never be in - don’t worry too much about them, focus on your own interests.

Thank you all for sharing your views. Really appreciate. We gave them a deadline to let us know if they wish to proceed now or not. House will go back to the market after the deadline.

I have been thinking about this non stop and can’t really read the situation - process has been smooth, they have been easy going buyers, perhaps they don’t really have an option, perhaps they are panicking, perhaps they are trying their luck. I don’t know. They are not open to discuss alternative solutions and waiting for them to sell is too risky, and not really a reasonable expectation.

We will probably lose the upward chain which is a shame as the next house really ticked the important boxes for my young family but I really can’t see what else can we do. Super disappointed ☹️

I know this will sound trite but with house buying you always have to take the view what will be will be. There are so many parts that can go wrong that I actually am amazed that houses actually do get sold.

we have bought and sold a few times in our lives and honestly we have lost dream houses and found things equal if not better later down the line. We have had awful buyers demand deductions at the last minute. We’ve had buyers go AWOL for months and then pull out. But in the end you do forget all that. Just run with it and see what happens at this point. A good estate agent should have a few people he can call and see if they are interested in your property.

I think you did the right thing -it’s exactly what l would have done. They sound like cheeky fuckers to me. Love they didn’t like any of the options open to them but that’s obviously not your problem

You are absolutely right and that’s the mindset I’m trying to have, is just difficult when we are on the heat of the situation.

Even if we don’t manage to sell and stay in our current home, we are still extremely fortunate to own our own property (which we love, we just needed a little bit more of space), in a lovely and safe community to raise our son etc. not all is bad.

Put yours straight back on the market, and offer the estate agent who sells it £500 cash to get a quick deal. Make sure the buyer knows it’s back on the market

Hi all! Coming back with an update! Long story short: in November our buyers absolutely ghosted us when we said through the EA and solicitors that we were not willing to wait. I guess that by ignoring us they hoped we would wait for them to sell their flat considering our far we were in the process. We put our place back to the market and after a couple weeks they re-appeared, acting very offended and officially pulled out. Our seller agreed to wait until after Christmas but in early January decided to go back to the market too. Full chain officially collapsed. That same week we received an offer, which was lower than the previous one, we asked for a couple of days to reflect. During that time, a new property appears in the market: only two road away from the first one we were trying to purchase, very similar layout (just a little bit smaller) but slightly cheaper and in much better condition (the first one needed a full renovation, was stuck in the 90’s). We went to visit it and loved it, and considering it was cheaper and didn’t need all the work we could actually accept the lower offer on ours and still save a lot of money! This was mid January and I’m so happy to share that we are completing and moving today!

so thank you for all the good advice and particularly to those who shared stories that sometimes things go wrong and you end in a better situation!

Congratulations! Sounds as if they did you a favour in the end!

Brilliant update!

Congratulations @PrettyFox I’m glad you stuck to your guns and that it all worked out in the end 😀

Congratulations.
Hope the move goes smoothly.

Quite simply they are not in a position to proceed or are not willing to proceed at the agreed price. So either you tell them to get lost or give them the reduction they want. I agree the estate agent should be telling them either proceed with the sale or we find another buyer. But that means more work for them.

Didn't see your update. But great it has worked out well.

They are no longer in a position to proceed so I'd relist my house too. I'd be wary of flat sales as they seem to take longer now. Obviously if their flat sells quickly they can be top of the offer list.

Wow, great update. Hope you have an easy move.

It all worked out better in the end, great update!

In effect they are trying to add another link to the chain, for a flat which is not even on the market. Bugger that. Excellent that you’ve found a better option, enjoy.

Aww what a lovely update! Congratulations 🥳

How exciting and so pleased it all ended up well. Thanks for updating us too.

Great update! Your previous buyers sound rather entitled and bizarre. The ghosting and complicating the chain were very out of order

Congratulations! Lovely to hear a happy ending.
Enjoy your new home