Property purchase - seller wont accept offer as 'not clean'?

52andblue · 2020-12-08T11:37:12+00:00

A friend is trying to buy a property. Arranged a mortgage in principle. Put in a verbal offer, was told would be acceptable. Put in a written offer via a lawyer. Sellers have just advised will not accept it as it is 'not clean, ie subject to a mortgage offer'. Eh? It is a modest wee flat so how the heck do they think they will sell it? If it is cash buyers only, why not say so? Am i missing something here? How to arrange the mortgage formally without an accepted offer? How do they accept the offer without a mortgage all tied up?

Original poster

52andblue · 08/12/2020 11:50

Lawyer says:
'We are in a catch 22 as until a price is agreed you will not be able to progress your application for loan. Even if they indicated that a certain price should be acceptable in principle you could progress your application for loan and incur any costs incurred in relation to that only to find that they want agree to a sale to a third party/ decide they want more meanwhile'.

Friend is having trouble grasping this.
I'm not familiar with the scottish property purchase method?
My friend needs a mortgage so cannot promise to buy without one?!
At what point would the seller be able to walk away if my friend went down this route?

OP posts:

mynexdoorneighbourisaprat · 08/12/2020 12:01

Not familiar with Scottish property but very active english property market
My guess is that the flat is un- mortgageable , ie not enough years left on the lease ? Or similar ?

Tierful · 08/12/2020 12:02

That’s not typical - it used to be but now it’s subject to suitable finance ie mortgage generally, and also subject to sale of existing property etc though I have heard of that being not accepted by sellers.

Sounds like they’re looking for cash buyers - perhaps the property is non standard and therefore non mortgagable?

I’m not a solicitor so don’t take my word but personally I would walk away from this.

MaxNormal · 08/12/2020 12:08

My guess is that the flat is un- mortgageable , ie not enough years left on the lease ?

Leasehold isn't really a thing in Scotland.

anon444877 · 08/12/2020 12:12

Agree with tierful, both times we've had an offer accepted it's subject to mortgage finance. Of course if they fancy they've a cash buyer in the offing maybe that's why they're doing this. I've know people lose out on an offer when they here is a cash rival bidder but a bit odd if your friend is the only interested party.

Possums4evr · 08/12/2020 12:12

Why is the solicitor not sorting this out? They can phone the seller's solicitor and ask what they mean. I do know we accepted an offer from someone who claimed to be a cash buyer (had the money in the bank from a sale) and then turned out to need a mortgage - added weeks to the whole process and left a sour taste!

Original poster

52andblue · 08/12/2020 12:20

Hi, thanks everyone...

It's a flat: 1st and attic floors, trad building. A bit run down but kit and bathroom there (tho need replacing) and new boiler. All v normal.
It is oiro £37K. Friend offered £40K (home report valuation)
No other property to sell but needs a mortgage. Deposit of 8K avail.
Friend hoped they'd bite their hand off I think?
Lawyer just says it's up to you if you want to incur costs going down this route, as it is 2nd attempt to buy by friend - 1st time was unlucky as mortgage v slow (made a complaint which was upheld and got £200 compensation!) and seller sold to another person. Friend now a bit nervous I think? :(

OP posts:

nibdedibble · 08/12/2020 12:23

New solicitor time, if they really want it

SilverBirchWithout · 08/12/2020 12:24

Not Scotland, but DS had agreed value of mortgage ‘in principle‘ before looking at properties. He had this basic agreement in writing. I’d advise friend to meet with a mortgage broker to discuss.

celtiethree · 08/12/2020 12:26

From your description I suspect that the attic has been converted without planning so they need a cash buyer.

SilverBirchWithout · 08/12/2020 12:27

This means all the salary and finance checks have already taken place so when he found a property all that was needed was for the mortgage company to survey and agree property was suitable for mortgage. This reduced any mortgage delays with purchase.

SilverBirchWithout · 08/12/2020 12:31

If ‘mortgage in principle’ is not sufficient friend should walk away. It implies property is unable to be mortgaged ie a big problem if she comes to sell again at a later date.

Possums4evr · 08/12/2020 12:36

Presumably your friend has already read the survey that came with the home report, would it not highlight any major problems that might affect a mortgage?

Original poster

52andblue · 08/12/2020 12:38

@SilverBirchWithout

Yes friend has written Mortgage in Principle for £40 from L&Country.

Attic is simply top two rooms (part coombed) with trad staircase access. Very common and in keeping for age / style of building.

It's a bit odd, right enough?
I think that friend and their lawyer are being cautious as last time he ended up with £400 costs for nothing (all the searches were done etc)
But i'm not clear why sellers are being so sniffy about a perfectly good offer backed up by a Mort in Principle?

OP posts:

Fundays12 · 08/12/2020 12:39

This doesn’t sound normal too me. I would walk away from it. If the seller wants a cash buyer only they should have said that but I suspect there is something else going on with the property and it could cost your friend a lot of money.

Original poster

52andblue · 08/12/2020 12:41

I understand they will release the Home Report once he has made an acceptable offer - he has spoken direct to sellers solicitors who say the "40K amount is fine, it's the clause 'subject to loan' that isn't''.

OP posts:

anon444877 · 08/12/2020 12:47

Home report should be available up front, without conditions. Your friend should walk away as the seller sounds highly dodgy to me.

VirginHouseSeller · 08/12/2020 12:48

I understand they will release the Home Report once he has made an acceptable offer

So he hasn't even seen a copy of the home report yet? I've just sold and bought property in Scotland and more often than not the home report is linked in the online advert. If they are refusing to show the home report before an offer is accepted I'd be worried.

MadinMarch · 08/12/2020 12:55

From your description I suspect that the attic has been converted without planning so they need a cash buyer.

This was my immediate thought too.

Puddington · 08/12/2020 12:56

@VirginHouseSeller

I understand they will release the Home Report once he has made an acceptable offer

So he hasn't even seen a copy of the home report yet? I've just sold and bought property in Scotland and more often than not the home report is linked in the online advert. If they are refusing to show the home report before an offer is accepted I'd be worried.

Absolutely this, major red flags!!! We're buying in Scotland atm and on the very rare occasions a home report wasn't available up-front on the listing page you were able to email/message and get it before even arranging a viewing. Would definitely make me think aside from all the other dodgy ways they are acting that they have something major to hide.

Possums4evr · 08/12/2020 13:01

No these days you see the home report up front, we had them available for viewers to take away if they hadn't requested it on line.

Original poster

52andblue · 08/12/2020 13:02

That's what he said re home report but he has Dyslexia so can sometimes get muddled so I'll definitely check on that thank you.

Looks like he is not having much luck on the housing front

OP posts:

2bazookas · 08/12/2020 13:03

@52andblue

Lawyer says: 'We are in a catch 22 as until a price is agreed you will not be able to progress your application for loan. Even if they indicated that a certain price should be acceptable in principle you could progress your application for loan and incur any costs incurred in relation to that only to find that they want agree to a sale to a third party/ decide they want more meanwhile'.

Friend is having trouble grasping this.
I'm not familiar with the scottish property purchase method?
My friend needs a mortgage so cannot promise to buy without one?!
At what point would the seller be able to walk away if my friend went down this route?

To be marketed in Scotland, the property must have a Valid Home Report and Valuation and this is freely available to all viewers and potential buyers and mortgage lenders. The HR and Valuation follows a set format and is provided by an independent qualified property Surveyor who is professionally liable for what he put in it. Unless the HR points up some major defect (requiring specialist investigation) , most buyers and mortgage lenders do not seek any further Survey. IOW, buyers in Scotland are spared the expense of paying for surveys on properties they miss

Your friend needs to present the HR+Valuation to her mortgage lender for their approval.
In Scotland, sellers expect the buyer to have their finance lined up BEFORE making a written offer via lawyers.

If the HR suggests any further specialist surveys,( eg for woodworm or subsidence)  her mortgage lender may defer any loan offer until  the potential buyer investigates (at her own expense).

If your friend  has not purchased in Scotland before, than she needs to abandon all notion of "how its done in England" because property conveyance is very different here. She needs to listen to her Scottish lawyer and  ask  him to explain anything she doesn't understand..

Tierful · 08/12/2020 13:04

Do not even think about making an offer without seeing the hone report!!

I’d be tempted to go direct to surveyor too - sounds well dodgy.

anon444877 · 08/12/2020 13:04

Does sound like this has the hallmark of another bad one - I've never viewed something I've not seen the home report on first.