In The Process Of Buying A Traded-in House, Slightly Confused?

[vickster]

I’m rather confused as what you own, are buying, are renting??

Is the 100k the full value of the house as you mention completing. Sounds a bargain?

 

[Cletus Van Damme]

I’m rather confused as what you own, are buying, are renting??

Is the 100k the full value of the house as you mention completing. Sounds a bargain?

No I sold my house last year but couldn't find one to move into, so I've been renting for just over a year. This is just the proceeds from the previous house. I am having to borrow some money as this house isn't that cheap, it's good value for a detached house though. The house in-question isn't a bad price, it's the best I could get really in this area, for the cash. I'm slightly bothered if I walk that I won't get anything else. The housing market is dead around here. I am guessing that Taylor Wimpey don't treat buyers of their new builds in this manner. The main thing annoys me is that I have only a rough idea when this house will be available. I would imagine that most regular home buyers, selling their own house would struggle with this nonsense. The current occupants of the house told me, that viewers of the house were put off by how far in the future they would be moving out etc.

I'll just have to suck it up... Thanks though

 

[Dave7]

We

I'm buying a traded in house that was traded in against a new build Taylor Wimpey house. The traded in house will not be available until the current occupants move out. I'm told that this will be sometime in September. Yet I am being told that I have to complete this Tuesday, pay a large deposit that I have, over 100K.

Then when the house that the occupants are buying is available I'll be given 12 days notice as to when I get the keys. I have slight concerns, why do they need the money now, what happens if it is delayed.

I was told by my solicitor, that I should get house insurance once it completes, yet I'm really confused as the occupants are still in the house. I'm getting no interest on the deposit paid, what if the housing company went bust. I find it all so vague. I am dealing with a trainee solicitor.

Has anybody done this kind of thing before please?

We did exactly that. It was some years ago so laws may have changed but we had no such problems. It went through as a normal purchase ie no deposit. Sounds iffy to me

 

[vickster]

No I sold my house last year but couldn't find one to move into, so I've been renting for just over a year. This is just the proceeds from the previous house. I am having to borrow some money as this house isn't that cheap, it's good value for a detached house though. The house in-question isn't a bad price, it's the best I could get really in this area, for the cash. I'm slightly bothered if I walk that I won't get anything else. The housing market is dead around here. I am guessing that Taylor Wimpey don't treat buyers of their new builds in this manner. The main thing annoys me is that I have only a rough idea when this house will be available. I would imagine that most regular home buyers, selling their own house would struggle with this nonsense. The current occupants of the house told me, that viewers of the house were put off by how far in the future they would be moving out etc.

I'll just have to suck it up... Thanks though

So the 100k is the deposit for exchange (not completion). Completion will be at some point down the line. Not sure how it’s any different to a normal purchase, where exchange happens and then completion. Just that you don’t have a date to complete

As my earlier post, demand to talk to the solicitor partner not trainee to confirm that all is in order

Are Persimmon and TW the same firm (I’m still not getting the connection between the house you are buying and the new build and where the current occupants are going?) it’s been a long day tho!

 

[Smokin Joe]

I phoned the solicitor. It is the solicitor that keeps hold of the money until it is completed.

Solicitors go bust too. I wouldn't hand anyone a 100k deposit.

 

[vickster]

Solicitors go bust too. I wouldn't hand anyone a 100k deposit.

They are regulated however and have to have indemnity protection etc

 

[Hicky]

Not a cat in hells chance I’d do that.
Behind our old house was/is a new build estate. People we knew traded their homes for these and if the old home wasn’t sold sharpish the builders dropped the price and the individual had to suck up the cost difference. Two/three years later they’re receiving bills for allsorts for upkeep, grasses areas/paving/communal lighting. The turnover or the homeowners is frightening.

 

[Pale Rider]

In whose interest is this solicitor supposed to be acting - yours or the builder's?

Seems to me the builder is either trying to sell you a house it doesn't yet own, or is selling you one with a sitting tenant - both complex and difficult transactions.

It's reasonable they want to know you are not a time waster, but I suggest you hold your nerve and offer a £5,000 deposit or walk away.

The worst they can do is say 'no', and there's a reasonable chance in a few months you will see the house on the market with vacant possession - much simpler.

 

[nickyboy]

They are regulated however and have to have indemnity protection etc

And they have a legal obligation to hold client's money in their client account which does not form part of their assets in the event of them going bust. Of course they can dip into the client account but that is illegal and would leave them with much bigger problems than just going bust

 

[nickyboy]

In whose interest is this solicitor supposed to be acting - yours or the builder's?

Seems to me the builder is either trying to sell you a house it doesn't yet own, or is selling you one with a sitting tenant - both complex and difficult transactions.

It's reasonable they want to know you are not a time waster, but I suggest you hold your nerve and offer a £5,000 deposit or walk away.

The worst they can do is say 'no', and there's a reasonable chance in a few months you will see the house on the market with vacant possession - much simpler.

To be clear what is actually happening here......

The builder has only one legal contract. That between the builder and the person buying the builder's house. However, the consideration for the builder's house comes in two parts; cash and another house in part exchange.

Now the builder has no interest in the part ex house. It takes that to facilitate the sale of the new build. So they need to back-to-back the purchase and sale of this part ex house. Their risk is that they legally commit to buy the part-ex house and the person they are selling it to (in this case the OP) backs out, leaving the builder with a part-ex house they don't want. So they effectively get the OP to make a binding commitment to buy by making them place a large deposit.

The builder will not accept a tiny deposit as you suggest. They are under real risk that they swap one problem (a new build they want to sell) for a different problem (a house they've taken in part-ex that they will get squeezed on by a buyer down the track). No chance the house will come on the open market down the track as that would require the builder to complete the sale of the new build, taking the other house in part-ex with no seller on the horizon. 100% guarantee that big builders would never do this

 

[Pale Rider]

Another question is with whom is the OP's contract?

If he buys directly from the people living in the house, if they fail to complete after exchange he can evict them.

What happens if the family in this case have a change of heart and don't want to move?

Seems to me the OP doesn't have much legal leverage, he cannot evict the builder because they are not resident.

It may be thought unlikely the family would fail to complete, but all sorts of things can happen - breadwinner loses his job, a subsidence scare on the new build estate, family fall out, etc.

 

[midlife]

Slightly off topic but when we were selling our house last year we asked about part exchange from a major house builder. The part ex they offered was pitiful and would shame even a car salesman.

 

[Cletus Van Damme]

As my earlier post, demand to talk to the solicitor partner not trainee to confirm that all is in order

Are Persimmon and TW the same firm (I’m still not getting the connection between the house you are buying and the new build and where the current occupants are going?) it’s been a long day tho!

The problem is I do not trust solicitors at all. I am assuming that they are going to make interest on the money, so I'm sure they don't care. When I sold my house last year I went with Premier Property Lawyers as recommended by the building society. They were shocking, so I thought that I would go local, they are useless also.

I wouldn't have a clue if Persimmon own TW. I always thought Charles Church was their upper market brand. I appreciate all the advice, this is doing my head in. It's bad enough buying a house, dealing with Estate Agents & Solicitors, throw a housing company in, it's worse..

My main concern is that the build is late, I'm sure it will be. The solicitor also told me to get home insurance for the house when I hand the cash over, which to me isn't a lot of money, but even so, its really confusing.

Its something I really should've researched, as I honestly don't think I would of bothered with this at all. On the other hand I'm just paying somebody's mortgage now with rent.

A work colleague had a mate that did the same, but was in a worse situation as he had a family and a house he had sold. He had to go and knock on the door of the house in question, ask if they knew when their new house would be finished. The housing company were just vague and messing him around.

It's a shame the government allows this, as it is the Fleecehold, ground maintenance that these new build estates command, as the councils won't adopt them. Pretty bad work, but that's this country and big business all over.

 

[Smokin Joe]

We moved into our place 18 years ago, built in 1989 as part of a new estate. It is only this year the council adopted the road, but we never had to pay a penny for upkeep. The builder used to come round once a year and spray the weeds at the edge of the kerb and as it was being adopted contractors cleared all the drains and repaired a few broken ones. I don't know who stumped up for that, but none of the residents had to contribute, ditto when the road was properly surfaced a year after we came here.

 

[Cletus Van Damme]

We moved into our place 18 years ago, built in 1989 as part of a new estate. It is only this year the council adopted the road, but we never had to pay a penny for upkeep. The builder used to come round once a year and spray the weeds at the edge of the kerb and as it was being adopted contractors cleared all the drains and repaired a few broken ones. I don't know who stumped up for that, but none of the residents had to contribute, ditto when the road was properly surfaced a year after we came here.

That's really good. I think it's a different world these days. The general public are ripped off by building companies, seems that you just have to suck it up, or buy an older house..