Buyer wants us in rented - seems a colossal waste of money

[ChainStress]

Our buyer is eager to move into our house but our vendor isn’t ready and doesn’t seem to be in a rush. Buyer has asked us to go into rented while we wait for our vendor. But the maths on this isn’t great.

Current outgoings - £1700/month on a low interest mortgage comprised approximately £1350 mortgage, approx £350 interest.

Potential rental - at least £2250 (we have three kids and both work from home - we need at least 4 beds). So each month we’d lose £1350 on rent that could have paid off our mortgage loan plus an additional £800 in rent (£2500 rent - £1700 current monthly outgoing).

Over 6 months that would cost us £12,900, plus another £3000 in additional removal costs. About £16k all together! And if it falls through with our vendor we’re stuck for even longer in an expensive rental paying off someone else’s mortgage until we find a house.

What am I missing? Why are people willing to break the chain if it’s so expensive?

@ChainStress tell your vendor to get a move on!!! you need to move!!

No way would I do that. It’s a ridiculous amount of money, the stress of moving twice into insecure accommodation, you are off the housing ladder with no definite end in sight - the risk is huge especially with a slow market and high rental costs (with rentals also being scarce) in a housing crisis. My buyers also asked that when I last moved when the market was significantly more bouyant. I said no way. They waited.

And this is exactly the problem with the buying/selling process in England.
where I live it’s a 34 day settlement period, this can be negotiated for an additional 14 days if needed. Everyone knows where they stand and the market moves quickly. A financial commitment has also been made early so nobody is pulling out last minute and collapsing the chain!
how long are you prepared to wait for your vendor? I gather house prices are coming down so will the price be negotiated in six months to reflect this?

Your vendor needs to go into rented. Totally unreasonable to accept an offer and then potter about. Your buyers will no doubt pull out.

Have you thought of asking your vendor to go into rented?

If your vendor is still looking, then there’s no real end date. They could find something tomorrow, or in six months time. Then the chain could take several months more.

I would definitely not go into rented, that’s throwing away good money, but I wouldn’t definitely start looking for a new house to buy.

If where you are buying hasn’t found somewhere, they need to hurry or you look elsewhere. You can’t be waiting 6 months as that’s unreasonable for all parties.

You have a few problems here op. It’s not just about inconvenience of moving twice.

The property market is going down at the moment, so you may lose a significant amount of money losing your buyer.

You may not find another buyer.

If your onward purchase haven’t found anywhere, they ideally need to move into a rented house. They can’t just hold up the entire chain whilst they leisurely look.

It depends why you have to move and if you are prepared to lose a good, committed buyer. They are going to pull out is my best guess.

@saraclara * *I've never heard of agents refusing to take on a property unless a seller's found. They're anxious to take on business and if word got around that was their approach, noone would go to them. However if you've accepted an offer and haven't found a property, they can get twitchy because they get nothing if the sale doesn't complete.

Sounds like your buyer has had enough so I’d expect them to pullout but the problem is you could face loosing the house your buying if you can’t find another buyer

as for the rental I’d squash into a smaller cheaper one and if your adult kids want more space and room to wfh then they have to pay the difference in rental

We moved earlier this year but prices have been plummeting around here and if I were in your situation I would really consider this as an option. Your vendor could still be buggering about this time next year and by that point all the houses will have dropped in value. You might even find that if you sell yours now for a good price you can keep your eye on the market for other houses dropping their prices whilst you are waiting for your vendor. Also don't do anything with regard to solicitors for your onward purchase until they have secured a property to buy and out things in motion.

The smart thing here is to move into rented and take as advantage of the falling prices… but I am not sure you have the energy to do that with dc.

It would be a no from me.

If you don’t need to move and can afford to lose your buyer, then stay put.

Here sellers are expected to have earmarked and viewed houses, and have a plan B in place for their onward purchase. It doesn’t need to be set in stone, but they are expected to have a proper solid plan in place. Absolutely. Otherwise the chain becomes static as one house holds up the others.

Here you are not taken as a serious buyer unless you have an offer/ preferably exchanged.

In your shoes @ChainStress i wouldn't move into rented (due to the cost/hassle), but I would start looking for another property. Your vendor sounds way too relaxed - I'd be worried that they're not serious about moving. Your buyer is probably thinking the same thing which is why they want to get things moving.

I did this once. But be got our buyer to pay the rental. No kids tho and we moved into an air BnB. All our stuff went into storage. It was about 16 weeks in total.

Sounds like you can across to the EA as not a very serious seller, and they wanted to make sure you had some idea what you wanted before they took you on as a a client.

Conveyancer here....I would find out if this has actually come from your buyer. I hear it all the time from estate agents but it is them pushing the sale to get there commission. When you actually speak to the Buyer they either say the estate agent suggested it or that they didn't even know it had been said.

I wouldn’t wait an additional 6 months as your buyer (how long has it been already out of interest?) for exchange and completion. I’d be looking already for an alternative property and would withdraw as soon as I had an offer accepted elsewhere.

That will mean you are no longer proceedablr with your purchase unless you find another buyer quickly or take out a bridging loan which will be more expensive than moving into rented accommodation.

So your choices are:

1. find another property to purchase which will complete more quickly
2. break the chain and move into rental or get your seller to do so
3. lose your buyer and consider bridging loan if required
4. split the costs of the rental option across the whole chain

Look after you and your family. There will be another buyer

I’m not sure house prices are dropping as much as some people on this thread think. I understand July saw the largest drop (0.8%) in the last 2 years but overall house prices remain steady and in some areas including mine they are rising.

The interest on our equity won’t go far especially once we’ve paid tax on it.

I now need to be very clear with our vendor that we can’t wait forever for them. We will have to impose a timeline somehow and if they pull out we’ll start again.

Agree with those who say this system is not fit for purpose.

Another thought, if the buyer is serious about rental, how about suggestion you pay 50:50, for six months or so.

You aren't taken seriously as a buyer unless you have exchanged on the house you are selling? So they expect every transaction to be max 2 properties? That is bonkers.

Well, this is how chains work, isn't it, and why they're so stressful.

You have to decide whether you're willing to break the chain or lose your buyer and remarket your house.

With 3 children I wouldn't be in a rush to move twice, either.

We lost our first buyers after 6 months because they got tired of waiting for us, fair enough. Put our house back on the market and accepted an offer from another buyer. The whole process of getting the house and garden viewing-ready was such a faff I was really hoping not to go through it all a third time. We started looking for rentals as well as houses to buy and ended up finding a rental we really liked, so we took a risk and went for it. However, the area we're buying in is a bit of a crazy market so part of the motivation was to be in the strongest possible position to buy. It's worked out for us as we are actually buying our rental (!) although I do realise that's rare and we're lucky.