Bridging Loan - danger of losing 10% deposit

J

johnnybegood

Registered User
Messages
122
hi, i have been through all the posts regarding Bridging and have to admit find it difficult to understand.

Basically my situation is as follows. I have sale agreed on a house and the seller is looking for us to sign contracts asap (will need circa 45k - which is 10% of the deposit)

Now we have sale agreed on our property but it wont go through until a few weeks later (ie the person buying our house wants to sign his contract on the same day that he gets his house contracts signed) this is fair enough as he obviously doesn't want to bridge.

I don't mind bridging and the bank seem quite happy to help us in this regard. however my question is this if we sign the contract and give the 10%, if our buyer subsequently pulls out before he signs our contract DO WE LOSE ARE 10%?

thanks for all help,

johnnybegood
 
Re: Bridging Loan - dangr of losing 10% deposit

If you sign contracts and subsequently don't complete the sale, you have a very good chance of losing the 10% deposit.

If your buyer won't take the risk of signing without having their property sold, you should ask yourself if you want to take that risk.

The bridging issue may be a smokescreen, i.e. they may still have their eye on another property-just a thought.
 
Re: Bridging Loan - dangr of losing 10% deposit

The simple answer is yes. Your solicitor should not be allowing/advising you to sign contracts for the purchase until your purchasers have signed unconditional contracts for your house. A chain is a pain (!) but it has to driven from the bottom rung upwards.

Sarah

www.rea.ie
 
We are in the same position ourselves. We've been told we have to sign today or they'll put the property back on the market and the contracts for our place haven't been sold yet.
I don't want to lose the house we want and I'm worried sick in case they don't sign.

Has anyone else taken this chance??
 
Kellier said:
Has anyone else taken this chance??
Click to expand...
It doesn't really matter, does it?

Each situation is going to be different. Don't take risks where you can't afford to lose.
 
Of course it matters, if everyone came back and said that they didn't do it then we would have to seriously think again. At the moment, everyone I have asked has different opinions.

I don't think it's as simple as saying don't take risks where you can't afford to lose.
 
Fair enough, if you are driven by popular opinion, then that's your choice.

For me, it is a question of risk. Each to their own.
 
I am not driven by popular opinion but having no experience of buying a second hand property I was interested to see what others thought and to hear of other peoples experiences.

It's supposed to be a discussion board, not a make sarky comments board.
 
That's my opinion, take it or leave it-I am not trying to be sarcastic or start an argument.
 
Kellier said:
We are in the same position ourselves. We've been told we have to sign today or they'll put the property back on the market and the contracts for our place haven't been sold yet.
I don't want to lose the house we want and I'm worried sick in case they don't sign.

Has anyone else taken this chance??
Click to expand...

I'd be very surprised if your solicitor would allow you to sign without having (effectively) sold your own house. You could of course override his/her advice but can you afford to lose the deposit? Don't do it.

Sarah

www.rea.ie
 
Your solicitor should be advising you. Does your loan offer from your bank not include a clause re: contracts having been signed for your own house? Without the specifics of the case, all that can be done here is to offer advice on OUR experiences, not what we would do in your situation.

If you can convey what conditions are attached to your loan offer, what conditions will apply to your bridging, how long you can sustain bridging and what advice your solicitor is offering, then I think there would be plenty more smart (in the positive sense of the word) comments.
 
Loan offer doesn't have a clause re contracts being signed for our own place and the bank are aware that this hasn't been done yet as we have applied for bridging in the event that we might need to do it. Solr has given a letter of undertaking to repay the original mortgage and bridging when our property has been sold.

Solr has advised that they would recommend not to sign prior to ours being sold but she also has told us that if we don't the sellers are going to put it back on the market.
 
I would let them put it back on the market - they may have no intention of doing so and just want to pressurise you into signing. The market has slowed considerably and it's August next week, I'd be surprised if they get any viewings never mind offers.

We were in a similar situation - being pressurised into signing without having signed contracts for our sale. Our solicitor advised against it and how right she was as we lost our original buyer.
 
Your 10% is only at risk if you are unable to proceed with the purchase by the time the date of close comes around. If you are happy to pay indefinite bridging and 2 mortgages, then there is no risk.

If you are not happy with either losing your 10% or not happy with indefinite bridging + double mortgage, then take the advice on offer from your solicitor.
 
You must log in or register to reply here.
Back
Top