The tale of the sale of our old house

[newhome]

1 minute ago, JSHarris said:

 

 

Sounds a sensible approach, although I wasn't going to mention the previous buyer being a religious trust - you never know, we may get a prospective buyer who's a member of their congregation!

 

Lol, you'd be pretty unlucky  although even people in a religious organisation will mostly only want people in private houses living next door. Just say it was an organisation wishing to purchase.

[Jeremy Harris]

2 minutes ago, newhome said:

 

Lol, you'd be pretty unlucky  although even people in a religious organisation will mostly only want people in private houses living next door. Just say it was an organisation wishing to purchase.

 

 

Knowing my luck, though....

 

The organisation refer to themselves as a charitable trust, so that seems a reasonable way to describe them, if anyone asks.

[lizzie]

@JSHarris it is usual with best & final written offers if it is a non dependent cash purchase to include some proof of funding e.g. a bank statement showing funds or a confirmation from their lawyer that funds are available.  Dont just trust what is written in their offer letter without seeing proof, sadly people can and do bend the truth if it suits them.

 

Good luck I hope one of the others works out well.

[Jeremy Harris]

Just now, lizzie said:

@JSHarris it is usual with best & final written offers if it is a non dependent cash purchase to include some proof of funding e.g. a bank statement showing funds or a confirmation from their lawyer that funds are available.  Dont just trust what is written in their offer letter without seeing proof, sadly people can and do bend the truth if it suits them.

 

Good luck I hope one of the others works out well.

 

 

My understanding is that the agent saw the balance in the numbered account and took that as proof that the funding was available.  Certainly I have a copy of the bank account details that were going to be used to fund the purchase, but not the full name of the account holder, and I think that is the critical issue. 

 

One problem we've encountered before in this age of online banking is that some online bank statements can be printed off and all they give is the sort code and account number, not the name and address of the account holder.  We ran into problems when getting proof of ID a couple of years with this and I had to go into the local branch and ask them to print and mail a proper statement (all our banking is now paperless).

 

My first attempt at providing our conveyancer with the proof of ID/anti-money laundering for this sale failed as I sent them the ordinary online account statement print off, which was rejected as it didn't have our names or address on it.  Luckily our bank must have realised the problems this can cause, as buried away on their web interface there is now an option to print a full "paper" statement.

[Ferdinand]

3 hours ago, Mr Punter said:

 

If they want to make this an HMO or hostel they will need planning consent.

 

Very much depends. For larger HMOs iirc 7 beds or more, which are Sui Generis, you need it but can sometimes just do it. For fewer rooms, not as standard, unless there is an Article 4 Direction in place, which can say different things. It at present tends to be London, some Uni towns, and larger cities, and places with anti-landlord politics which have gone over the edge on this one. Dorset ... probably unlikely.

 

I think this is about 3 bedrooms which would not usually be a PP one anyway.

 

On the purchase, I would gove ythem the meeting and offer an indemnity, and a sharp deadline to accept (eg 48 hours), and a short deadline to exchange (eg 7 days). Then I would also return to the list of viewers for someone hot to trot.

 

F

[AliMcLeod]

1 hour ago, JSHarris said:

Sounds a sensible approach, although I wasn't going to mention the previous buyer being a religious trust - you never know, we may get a prospective buyer who's a member of their congregation!

 

People can be funny - they want things because other people want them (fear of missing out) but, conversely, there is a risk that others on your list will be reticent to move ahead because of what has happened (if it wasn't good enough for them, its not good enough for us).

 

For that reason, i'd be mindful to put something in the mind of the next set of prospective purchasers that distances them from the people who pulled out, making it clear that the issue does not apply to them. You can also reiterate that you had a list of prospective buyers, playing on their fear of missing out.

[Jeremy Harris]

37 minutes ago, Ferdinand said:

 

Very much depends. For larger HMOs iirc 7 beds or more, which are Sui Generis, you need it but can sometimes just do it. For fewer rooms, not as standard, unless there is an Article 4 Direction in place, which can say different things. It at present tends to be London, some Uni towns, and larger cities, and places with anti-landlord politics which have gone over the edge on this one. Dorset ... probably unlikely.

 

I think this is about 3 bedrooms which would not usually be a PP one anyway.

 

On the purchase, I would gove ythem the meeting and offer an indemnity, and a sharp deadline to accept (eg 48 hours), and a short deadline to exchange (eg 7 days). Then I would also return to the list of viewers for someone hot to trot.

 

F

 

Just to get clarity on the position with regards to the covenant, I spoke to a friend who is a solicitor a short moment ago. 

 

His considered opinion is that the second condition has now been effectively made void by the 1985 Housing Act, and that it would be unlikely that it could be enforced to prevent the house being used as an HMO.  He's also of the opinion that, given the small size of the house (and the plot) it would be unlikely to be used as an HMO anyway, although he did highlight that the large number of students in the area mean there is a high demand for student accommodation, and there is very little in the city itself, so many students live in the outlying villages.  His view was that our house may well appeal to a buy to let landlord in the area, but that none of the covenant conditions would effectively prevent that.  We didn't discuss planning consent, but I'm pretty damned sure that it would not be forthcoming, having worked on the Neighbourhood Plan and knowing who has influence in the local area.

 

He thought that we would be unlikely to get either the first or third conditions of the covenant lifted, unless our neighbour "has lost his marbles" (his words, not mine!).  He also couldn't see why the charitable trust had a problem with the covenants as they stand, if they are being honest with the reason they have given (in writing) for wishing to purchase the house as accommodation for elderly or younger people. 

 

He suspects (as has been mentioned earlier by @lizzie) that the charitable trust isn't being wholly open about what they want to do with the property, and thinks that the reality may be that they wish to use it as a meeting house.  What has convinced him of this is that there is parking for around 5 or 6 cars at the moment, and simply taking out a hedge, erecting a fence along the edge of the lane and removing the garage and attached car port would extend the parking area to accommodate perhaps as many as a dozen cars.  I tend to agree with him, as until he mentioned how much parking space could be created I hadn't considered that it would make a pretty large car park.

 

[AliMcLeod]

1 hour ago, JSHarris said:

 

 

Knowing my luck, though....

 

The organisation refer to themselves as a charitable trust, so that seems a reasonable way to describe them, if anyone asks.

Aren't all churches set up a charities for tax purposes?

 

[Ferdinand]

22 minutes ago, AliMcLeod said:

Aren't all churches set up a charities for tax purposes?

 

 

Usually - but what is the charitable trust depends on the Governance of the church, and also varies variably for different aspects eg Parsonage Houses, Church Buildings, Ministry Trusts (eg one might own a central or missionary programme) or Retreat Centres. 

 

In some each local congregation would be the trust, in others it is more centralised, but the local congregation may or may not own eg the parsonage. For CofE the basic trust is the Diocese, but larger congregations (turnover over £250k or £500k or something) also have reporting requirements, and Church Council members still have the personal responsibility of charity trustees, which is one of the things that makes them pursue Chancel Repair Liability under charity law to maximise assets once it was clear that the Liability was still extant - at least until expensive legal advice says or said otherwise. The other thing that forced them was that English Heritage aiui said "no Listed Building Grants until you have gone after all other sources including Chancel Repair Liablility"; PCCs hated it.

 

Some (not many these days because regulation is more intrusive now eg vetting and barring) might have a theology of not engaging with the secular state at all, so might avoid charity law entirely and be unincorporated associations. Though that tends to be more representative of newer or less significant religions in the UK eg very small Mosques or newly created sects or new agers / wicca etc.

 

Ferdinand

 

Edited August 14, 2018 by Ferdinand

[Jeremy Harris]

11 minutes ago, AliMcLeod said:

Aren't all churches set up a charities for tax purposes?

 

 

 

I think so, yes.  This trust is very local, was set up in 1982 originally, and only covers the area immediately around Salisbury.

 

We're back in the "viewing madness zone" again - four new appointments to view in the past hour, plus we still have a handful of potential purchasers from the last week of viewing madness.  I really cannot get my head around the level of demand there is around here, it seems astonishing, given that the property market in general has only been recovering fairly slowly.

[AliMcLeod]

2 minutes ago, JSHarris said:

 

 

I think so, yes.  This trust is very local, was set up in 1982 originally, and only covers the area immediately around Salisbury.

 

We're back in the "viewing madness zone" again - four new appointments to view in the past hour, plus we still have a handful of potential purchasers from the last week of viewing madness.  I really cannot get my head around the level of demand there is around here, it seems astonishing, given that the property market in general has only been recovering fairly slowly.

 

Make sure you mention to any new buyers that it went to a closed auction last time and the accepted offer was above the asking price. With any luck, you might end up with a better price to compensate for this hassle/stress ?

Edited August 14, 2018 by AliMcLeod

[Jeremy Harris]

Well, another update.  The house is sold again, subject to contract, another cash buyer with no mortgage.  We're happy, have got the price we wanted, and hopefully this transaction will go through OK.  The current prospective buyer has seen the covenants and isn't bothered by them, so now we just have to go through the paperwork again.  Thankfully it looks like we can re-use much of the paperwork from last time, so it is likely that the pace of the sale will be governed by the buyer's solicitor.  It's also possible that they may be able to save some time by purchasing the searches from the previous buyer - that may well knock a couple of weeks off any delay.

 

Fingers crossed that we don't hit another hitch - this house selling lark really is a damned stressful business.

[HerbJ]

and toes and... and everything crossed!

Well done....

[ProDave]

2 minutes ago, JSHarris said:

Well, another update.  The house is sold again, subject to contract, another cash buyer with no mortgage.  We're happy, have got the price we wanted, and hopefully this transaction will go through OK.  The current prospective buyer has seen the covenants and isn't bothered by them, so now we just have to go through the paperwork again.  Thankfully it looks like we can re-use much of the paperwork from last time, so it is likely that the pace of the sale will be governed by the buyer's solicitor.  It's also possible that they may be able to save some time by purchasing the searches from the previous buyer - that may well knock a couple of weeks off any delay.

 

Fingers crossed that we don't hit another hitch - this house selling lark really is a damned stressful business.

Best of luck

 

Just heard from our tenants that they have to rent for 3 years before they can get a mortgage to buy it, so longer to wait than we first thought.  It always used to only be 2 years of accounts for self employed to get a mortgage, now they want 3.

[Jeremy Harris]

Thanks folks. 

 

That's a bit of a bugger, Dave, having to wait yet another year.  There's a staggering difference between the market up there and the market down here, it seems.  One of the things that's really stressed me out has been the constant flood of people viewing the house, asking questions etc, let alone the fiasco over the sale that fell through.

[Tennentslager]

Hope in a new Scotland we will see repopulation of the Highlands...plenty of room and beautiful.

Might mean motorways and train lines but why not, population could easily grow by half comfortably in the long term. 

Closer ties with Scandinavia including flights and ferries too...we are far to south east centric. 

How the devil can a police sergeant and a nurse afford a reasonable house down there...it's crazy. It's not as if you don't need them and with a joint salary c£70k you *might* get a mortgage of what...? £200k.

Even in Glasgow that gets you a very nice house in a nice area. In London you get not a lot...

Edited August 17, 2018 by Tennentslager

[Jeremy Harris]

20 minutes ago, Tennentslager said:

Hope in a new Scotland we will see repopulation of the Highlands...plenty of room and beautiful.

Might mean motorways and train lines but why not, population could easily grow by half comfortably in the long term. 

Closer ties with Scandinavia including flights and ferries too...we are far to south east centric. 

How the devil can a police sargeant and a nurse afford a reasonable house down there...it's crazy. It's not as if you don't need them and with a joint salary c£70k you *might* get a mortgage of what...? £200k.

Even in Glasgow that gets you a very nice house in a nice area. In London you get not a lot...

 

I've never understood the rationale behind the move towards the South and the depopulation of the North.  I can understand the original reason for it, the decline in manufacturing and heavy industry, which was focussed in the North and NI, but I cannot for the life of me understand why, when the UK economy switched from manufacturing to a service industry basis companies didn't set up in the North, where practically everything is cheaper.

 

Nowadays, with a lot of the service economy not needing people to work from a fixed office base there's even more reason for encouraging revitalisation of the North.  We both absolutely loved the 5 years we spent living and working in Dumfries and Galloway, whilst although not really "the North" (it's about the same latitude as Newcastle, IIRC) there was a sense of community spirit, friendliness and general high quality of life, that we've not experienced anywhere else we've ever lived.  If it wasn't for (increasingly fragile) family ties that drew us back South, we could very comfortably have tried to build somewhere in the Rhins of Galloway, and feel right at home.

 

The fly in the ointment, at the time we were looking around, was the spectre of IndyRef, and the stories we were hearing from friends around Portpatrick that were selling up and moving South of the border as they felt certain that the Indy's would win and there would be an economic meltdown, with associated persecution of anyone seen as being English.  Some were seriously upset, as they'd lived there for decades, yet suddenly found a minority of Nats behaving pretty hatefully, evenly violently, towards them, and they feared that property prices would crash and they'd be stuck living where they weren't wanted any more, so a fair few just moved South, as a precaution.  Of course their worries never really materialised, but I can understand their fear.  You only need to wander into Stranraer late on a Friday or Saturday night to see the darker side and how bad it can be.  We never saw that just a few miles away in Portpatrick, but we all knew it was there amongst a tiny, but vocal, minority, waiting for a bit of drink to bring it to the surface.

 

The main problem is the government in Westminster that seems totally incapable of looking outside the boundary imposed by the M25.  We even feel that here; many people locally do the daft, 1 1/2 hour each way commute into London to work, utter and complete madness.

[recoveringbuilder]

Never will understand why people want to live in London, ok a lot of them are chasing the big money but they’re also having to spend it to live, when we sold our big 385m2 house in 2016 a friends son bought a flat in London, it cost more than we got for our beautiful house, the flat looked like an ex council, total madness!

[recoveringbuilder]

@Ferdinandcould you please explain Sui generis as I recently saw this on a planning application 

[Ed Davies]

Sui generis means of its own type, one of a kind.

[Ferdinand]

14 hours ago, Christine Walker said:

@Ferdinandcould you please explain Sui generis as I recently saw this on a planning application 

 

It means it does not fit any recognised category, in this case Use Class.

 

HMOs are HMOs up to I think 6 bedrooms .. bigger than that and they have to be considered individually.

 

F

[Jeremy Harris]

Another update, and a tale as to why a cash buyer may not be as good as one who needs a mortgage.

 

We accepted an offer from a cash buyer on 17th August, nearly 3 months ago, expecting that we would exchange contracts within 6 weeks and complete soon after that.  Boy were we wrong in making such a bold assumption!  We finally exchanged contracts, after a series of long delays and hassle, on 14th November...

 

We're now set to complete on 26th November, assuming nothing else goes awry.

 

The reasons for the delay are not wholly clear.  Firstly, the buyer's solicitor seemed slow and not wholly on the ball, and needed chasing all the time by our solicitor (who frankly got as exasperated as ourselves).  The buyers survey (a full structural survey) was done within a couple of weeks, and was completely clear, except that I made a tactical error that may well have contributed to a part of the delay.  When the surveyor asked about the age of the electrical installation, I told him the truth, that it dated to when the house was built in 1986.  My error was in adding that as I was going to remove the additional wiring in the garage/workshop, that was associated with the lathe, two milling machines, pillar drill, bandsaw etc I had in there, and as I'd be removing my car charge point at the same time, I would be providing the buyer with an Electrical Installation and Condition Report (EICR) prior to exchange of contracts, as an assurance for the buyer that the electrical installation was safe and OK after all this extraneous wiring had been removed.

 

For whatever reason, the surveyor failed to pass this on to the buyer, but instead made a strong recommendation that the buyer should commission an EICR, and went so far as to recommend a company to do this.  I have a VERY strong suspicion that this was a bit of mutual back-scratching, as the charge from the company he recommended was £320 + VAT, way OTT for less than half a day's work by one chap (who wasn't even a Part P ticket holder, it turned out).  To say this was a bloody nuisance was an understatement, as it meant bringing forward the transport for my machine tools, removing my charge point much sooner than I really wanted and so causing us a fair bit of hassle.  Nevertheless we went along with it, although I ended up lending the electrician some of my test gear, as otherwise some of the testing wouldn't have been done.  As it was he didn't physically inspect a lot of stuff that, IMHO, he should have done.  As expected (as I'd done a full EICR a few days before the electrician came around to repeat it) there were no problems found, and the installation was in damned good condition for its age.

 

For some completely inexplicable reason, the electrician didn't send the report to the buyer for FOUR weeks.  I have absolutely no idea why at all, as his multitester is similar to mine, in that it stores all the data and squirts it out in a  form that can be copied straight into an electronic EICR report.  I even gave him a copy of my EICR report so he had all the non-inspection and test info, like dates, names etc.

 

So we are now around 8 weeks after having accepted the offer, and are keen to push on and exchange.  At this point we learned that, although the buyers solicitor had (allegedly) received the deposit money from the buyer, he hadn't thought to start the money laundering or identity verification checks.  Two weeks later, when we were getting increasingly frustrated at the lack of any will to suggest dates from the buyer (which we needed, as my wife normally needs 4 weeks notice to arrange leave, something the buyer knew full well) we were told by our solicitor that the buyer had been referred for checks under the "unexplained wealth" rules.  This is something her solicitor should have done right at the start, but for whatever reason he waited until all the other conveyancing work was complete before starting it. 

 

Eventually whoever it is that checks out people spending cash on houses concluded that all was OK, and we expected (and were told by our solicitor) that we would exchange contracts on Monday 12th November.  We waited all day for the 'phone call from our solicitor, which eventually came at 16:30, saying that the buyers solicitor had a query over the covenants that needed an answer before exchange.  Some may remember that we had an issue with the first buyer pulling out because they didn't like the covenant restricting the house to being a dwelling and preventing the building of anything other than a single storey house on the plot.  Following that, we made sure that every prospective buyer had a written copy of the registry entry with the covenants, so if they made an offer they were fully aware of them.

 

To say I was just a wee bit pissed off on Monday evening is an understatement.  We had answered the solicitors enquiries about the covenants around a week or so after we accepted the offer, so as far as we were concerned this had all been dealt with and accepted.  We got our solicitor to remind the buyers solicitor the following morning that he already had copies of our answers to the questions he'd just repeated, and that nothing had changed in the intervening 10 or 11 weeks to change that.  The buyers solicitor then said that the only delay in exchanging contracts was getting the deposit money from his client.  I was told by the buyer than the deposit money had been transferred to their solicitor some 6 weeks earlier...

 

Anyway, late on Wednesday the 14th November we finally had a phone call, followed by an email to confirm, that contracts had been exchanged.  I had a bit of a post mortem chat with our solicitor, who suggested that things should have been a lot quicker, and that had we opted to accept the (higher) offer from the couple who needed a mortgage we would almost certainly have completed the sale at least a month earlier.

 

The moral of this tale, IMHO, is that in the current climate it isn't always the best option to accept an offer from a cash buyer, especially one who seemed to be very inexperienced in the way property transactions operate and who also seemed gullible when it came to being guided by "professional" advice. 

 

I shall be well and truly glad to see the back of the old house in a  weeks time, and start planning a nice holiday, well away from anything to do with building or house sales...

 

The next challenge is to choose a new bank, as for various reasons the bank we've been using for all the house build related stuff is a total PITA.  I'm going to put off doing that for a few weeks though, as I'm not sure my blood pressure can cope with another round of stress-inducing activity.

 

[Oz07]

I've always found mortgaged buyers easier than cash. Especially FTB they are the best. 

 

The problem with cash cash buyers is what they spend on the sundries involved in the purchase is a small portion of their money so they never feel locked in. Meanwhile a thousand pounds could be a big chunk to a 10% depo buyer. As well as that the mortgage process seems to keep the conceyancing wheels well greased. 

[Jeremy Harris]

20 minutes ago, Oz07 said:

I've always found mortgaged buyers easier than cash. Especially FTB they are the best. 

 

The problem with cash cash buyers is what they spend on the sundries involved in the purchase is a small portion of their money so they never feel locked in. Meanwhile a thousand pounds could be a big chunk to a 10% depo buyer. As well as that the mortgage process seems to keep the conceyancing wheels well greased. 

 

 

I'm now absolutely convinced that you're spot on.  Previously I'd assumed that a cash buyer was least risk, now I'm not at all convinced that's the case.  We've been kicking ourselves for not accepting a (higher) offer we had from a couple who needed a mortgage.  We know the valuation on the old house exceeded the sale price, even for the higher offer we had from the couple who needed a mortgage, and as you rightly say, I'm sure the mortgage process would have helped speed up the conveyancing process. 

 

As well as having accepted a lower price from the cash buyer, we've also ended up paying out at least a month to six weeks worth of running costs, mortgage interest charges etc, so that's probably the best part of another grand wasted.

[Guest Alphonsox]

Thanks for the detailed update - I've got all this coming up next year, so "forewaned is forearmed".

Regarding banks I would recommend First Direct - I've been with them since they started and have always found them extremely capable and have never had any issues. They are consitantly rated as the best personal bank in the UK. They will currently give you a £150 Expedia voucher for switching which would help with the holiday costs !