English law sucks!

[NOMONEYBUTAMERC]

Having been let down three times by buyers of their flat , my daughter and son-in-law were delighted when a couple came to view, made an offer for a "quick sale " as they were selling their house to a cash buyer.
After several months of delays , they received a visit from their buyers ,in order to measure up for wardrobes etc. At this point , the couple revealed that their initial buyer had pulled out , but another offer had been made and accepted , and they should be in a position to complete by the end of this month .
My daughter arranged for a survey on another house ( £450 ) and proceeded to pack as much stuff as possible , ready to exchange contracts tomorrow, and complete on friday . Arrangements had been made for my grandson to start school near to their new house .
At 4p.m. on friday , they received a phone call advising them that their buyer had pulled out. He is apparently going to work in Dubai , and did not think his buyer would be able to complete in time!
Unfortunately , my daughter and her husband now have to lose legal fees and survey costs due to timewasters. The surveyor may well earn another £450 next month , surveying the same property for another potential purchaser , and the solicitor have another client for this house.
Is it not time we changed our laws , since I think in Scotland the person that reneges on the deal has to pay the costs ??

 

[Deleted member 37751]

Really sorry to hear about this pal.

The world seems to be full of people who live in their own little bubble and fcuk everyone else and these seem to have been the type.

Before we bought the house where we now live, we put an offer in for this other house. Paid all sorts of fees that I don't even want to recall.
Four hours before we were due to complete, the couple that were selling the house had a massive barney and decided they weren't going to sell!!
After a polite chat with him, I did recover some of my costs though....

I hope it works out for them in the end.

 

[Shude]

Is it not time we changed our laws , since I think in Scotland the person that reneges on the deal has to pay the costs ??

We do in England if the contracts have been exchanged. These days people want to exchange and complete on the same day though.

In the last few months I've paid nearly a grand in fees for searches, credit checks, surveys and other nonsense due to three aborted sales (two at the very last minute). As there was no contracts in place we are not able to do anything about it! One of the buyers kept some credit card debts quiet and their bank found out about it, I offered to help clear them if it was only a few hundred pounds just to get the sale to go through but it was £10k! Told them to stick it, this was a week before the moving date! Morons.

 

[wemorgan]

They have my sympathy. I'm also going through the house buying process myself. At risk I have so far; £600 legal fees, £400 survey, £1000 remortgage fee. It's a crazy system.

 

[davidjpowell]

It's a crazy system, but no one seems to have come up with anything better.

On a point of order! It's unlikely that the Surveyor will have seem more than £200 of that money.

The Scottish system can be equally fraught, with offers over and buyers needing to have the finance's lined up...

 

[developer]

Having been let down three times by buyers of their flat , my daughter and son-in-law were delighted when a couple came to view, made an offer for a "quick sale " as they were selling their house to a cash buyer.
After several months of delays , they received a visit from their buyers ,in order to measure up for wardrobes etc. At this point , the couple revealed that their initial buyer had pulled out , but another offer had been made and accepted , and they should be in a position to complete by the end of this month .
My daughter arranged for a survey on another house ( £450 ) and proceeded to pack as much stuff as possible , ready to exchange contracts tomorrow, and complete on friday . Arrangements had been made for my grandson to start school near to their new house .
At 4p.m. on friday , they received a phone call advising them that their buyer had pulled out. He is apparently going to work in Dubai , and did not think his buyer would be able to complete in time!
Unfortunately , my daughter and her husband now have to lose legal fees and survey costs due to timewasters. The surveyor may well earn another £450 next month , surveying the same property for another potential purchaser , and the solicitor have another client for this house.
Is it not time we changed our laws , since I think in Scotland the person that reneges on the deal has to pay the costs ??

Very sorry to hear this.

Part of the estate agent's job (in this case, your agent) is to confirm the chain is proceedable (including confirming "cash" buyers have the funds) and to maintain the communication to avoid situations like this.

What was their take on the situation?

Good agents don't take a back seat when solicitor's take over.

Goodness knows, they charge enough, and don't get paid until the transaction completes.

 

[NOMONEYBUTAMERC]

Good points raised Developer . I will pass these comments on to my son-in-law . He needs to have a meeting with the agent . ( Hes a 6ft 4in rugby player , so i think the agent will hear him out ! ). I do feel for them though , they were really looking forward to the move , and like most young couples , can ill afford to lose money.

 

[finisterre]

It is very annoying but I don't think there are any ways round it.
It boils down to the finance.
The risks of a bridging loan don't really bear thinking about.
I was stuck with one for nearly a year after a buyer fell through and it was very painful.
Losing £450 might be a lucky escape when you look at the alternatives.

 

[Charles Morgan]

My sympathy. Moving is a royal PITA and I am selling at present. I received a low-ish bid from a developer but one represented as being rock solid, so I put in an offer on a property, my agent assured the vendor's agent that my buyer was rock solid etc, only for my purchaser to drop out 10 minutes later. Fortunately I had incurred no legal or other expenses, but until exchange you live with the reality that they can just walk away, and certainly round here, regularly do.

 

[developer]

It's certainly a fraught process.

I took an agent to the Ombudsman after he told me my buyer was waiting for reports on the property he was buying when, in fact, he'd pulled out 3 weeks earlier - the agent was banking on back filling the chain with another buyer.

I was awarded £500 (not much really) and a huge dose of satisfaction for stuffing it to a b*ll**** agent.

 

[NOMONEYBUTAMERC]

Thanks for all the comments and advice . Sadly , it seems to be a common occurence , which leads me to think even more that the system is long due an overhaul, particularly as in this electronic age so much information is only a few clicks of the mouse away.

 

[DITTRICH]

Chains

It is a sad fact of life that your can't rely on anything until contracts are exchanged and even then it can go wrong before completion. My purchases have been from developers and thus chain free. My step son had a very trying time buying an apartment as there was a charge on the property put there by a third party to whom the seller owed money. It took ages to get the seller to finish the paperwork and settle the debt, then get the charge removed, then exchange and complete.

 

[dyver]

It's a crazy system, but no one seems to have come up with anything better.

On a point of order! It's unlikely that the Surveyor will have seem more than £200 of that money.

The Scottish system can be equally fraught, with offers over and buyers needing to have the finance's lined up...

Over on the rock, we have a 10% down on offer system, if you pull out then you lose your 10% and if you want to gazzump you have to find an extra 10% to cover the sellers fees. Sorts out the wheat from the chaff no problems

 

[Rich27]

I have had it happen to me,
Got an offer on the old place, then put an offer in on the property we wanted, got all the searches and surveys done to have our potential buyer pull out leaving us a good few quid down.
Its a right pain

 

[kth286]

It's all hypothetical until contracts are exchanged, so never put any plans in place.

Normally all transactions in the chain will exchange on the same day, and everybody will have agreed via their solicitor, on a completion date.

Normally the solicitors will not allow exchange if there are any oustanding matters.

Majority of sales falling through used to be property condition related with problems picked up on surveys. Hence the previous Gov introduction of HIPs (home information packs) but have since been dropped by present Gov as a result of agents lobbying re present poor state of markets. Bad move in my opinion.

In present market, finance is the biggest problem, with morrtgage offers not available, because of people's poor credit management.

 

[Shude]

Over on the rock, we have a 10% down on offer system, if you pull out then you lose your 10% and if you want to gazzump you have to find an extra 10% to cover the sellers fees. Sorts out the wheat from the chaff no problems

This is exactly what we have in England too but only after exchange of contracts. Prior to that anything can happen!

My Brother and sister in law moved house last year and during the final week were told that the "first time buyer" at the bottom of the chain no longer had the deposit and the chain of about 5 people could either stump up the deposit between them or give up on the whole thing. Each party ended up finding another £2k.

It's tempting to tell them to shove it and not move but if you already have your heart set on the new house/area, over a grand invested in fees and have moved jobs to the new area then it's basically impossible and you'd be doing the same thing to all the other people in the chain.

The "first time buyer" was represented by a solicitor who turned out to be a relative and I reckon they were property developers/investors who had done this sort of thing loads of times. It stinks.

 

[wemorgan]

IIRC the original plan for HIPS was to include a survey of sorts, but the survey was dropped and diluted to only include trivia like efficiency ratings. So it cost sellers money but offered little of value to potential buyers. I'm glad it was dropped.

The English system of buying houses leaves the contract exchange too long after the initial offer is accepted. If mortgages were arranged upfront and structural surveys and searches done by the seller then offers can be made with 80% of the preparation completed.

Before I put an offer on the property I hope to buy I had a mortgage in principal agreement. I assumed this was the norm, as how else can a buyer know whether they can afford a property or be likely to be offered a mortgage? But no one so far has asked to see this document. I would have thought the estate agent would have liked to see it.

 

[kth286]

IIRC the original plan for HIPS was to include a survey of sorts, but the survey was dropped and diluted to only include trivia like efficiency ratings. So it cost sellers money but offered little of value to potential buyers. I'm glad it was dropped.

The English system of buying houses leaves the contract exchange too long after the initial offer is accepted. If mortgages were arranged upfront and structural surveys and searches done by the seller then offers can be made with 80% of the preparation completed.

Before I put an offer on the property I hope to buy I had a mortgage in principal agreement. I assumed this was the norm, as how else can a buyer know whether they can afford a property or be likely to be offered a mortgage? But no one so far has asked to see this document. I would have thought the estate agent would have liked to see it.

but all you say above WAS the initial purpose of a HIP ie. all the paperwork including searches AND house condition report would ALL be in place before the house was put on market - excellent solution.

Your mortgage in principle is excellent too and should be mandatory in my view.
Agent not wanting to see proof of mortgage availability in advance of giving
your offer to Vendor is just plain naivety - most are just kids who have never owned a house or mortgage themselves and do not have the knowledge.

 

[GP801]

Italian administration can be a nightmare but with house purchase it seems to work beter than in the UK. On signing the agreement to purchase when the initial deal is agreed the buyer pays an amount up front. In our case 10,000 euros. If the buyer backs out then this is lost. If the seller backs out they have to pay back double the initial payment. Concentrates the mind. It also helps that the local banks will never lend large multiples of income or over approx 70% of the property value. Much to our surprise our purchase was totally hassle free and completed exactly on time.
One of the other quirks of the system is that both buyer and seller pay the estate agent.

 

[finisterre]

shude-My Brother and sister in law moved house last year and during the final week were told that the "first time buyer" at the bottom of the chain no longer had the deposit and the chain of about 5 people could either stump up the deposit between them or give up on the whole thing. Each party ended up finding another £2k.


considering how it is first time buyers who prop up the whole shebang this doesn't strike me as being too bad. When we last sold the two people buying were each selling their houses in Headingley to landlords. We were getting 200k more than we paid, that was essentially coming from a dozen young people living in shared houses and building their own personal debt mountains.

It felt massively unfair.

We took the money though.